By Scott DiSavino
May 27 (Reuters) - U.S. oil drillers cut rigs for a ninth
week in the last 10, energy services company Baker Hughes Inc
BHI.N said on Friday, despite crude prices this week testing a
seven-month high at $50 a barrel.
That is a key level that analysts and producers said would
trigger a return to the well pad.
Drillers cut 2 oil rigs in the week to May 27, bringing the
total rig count down to 316, the lowest level since October 2009
and about half the 646 rigs a year ago, Baker Hughes said in its
closely followed report. RIG-OL-USA-BHI
Before this week, drillers cut on average 11 oil rigs per
week for a total of 218 so far this year.
They cut on average 18 oil rigs per week for a total of 963
in 2015, the biggest annual decline since at least 1988 amid the
biggest rout in crude prices in a generation.
The rig count has dropped since hitting a peak of 1,609 in
October 2014 as U.S. crude futures CLc1 fell from over $107 a
barrel mid-2014 to a near 13-year low around $26 in February.
U.S. oil futures CLc1 have recouped about half of their
losses and broke above the $50-mark on Thursday and were trading
around $49 on Friday with analysts predicting range-bound
markets for the next few months as supply outages slowly help
clear a glut of crude. O/R
U.S. oil executives and analysts have said any price rise
above $50 could fuel a resurgence in new drilling projects.
"For approximately two weeks, crude has held steady in the
$45-50 range. During the first quarter earnings season, a number
of exploration and production companies indicated that prices
near that range could lead them to add rigs," analysts at
Simmons & Co, energy specialists at U.S. investment bank Piper
Jaffray, said this week in a note.
"These anecdotes lead us to believe that a modest
improvement in the rig count could develop beginning in the
coming weeks," Simmons said.
The U.S. rig count generally reacts to prices with a three
or four-month lag.
Further ahead, crude futures were fetching around $50 for
the balance of 2016 CLBALst and over $51 for calendar 2017
CLYstc1 .
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Graphic on U.S. rig counts http://graphics.thomsonreuters.com/15/rigcount/index.html
U.S. natural gas rig count versus futures price http://link.reuters.com/nuz86t
Thomson Reuters Analytics natural gas data reuters://screen/verb=Open/URL=cpurl://pointcarbon.cp./trading/gmtna/
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