U.S. oil drillers add rigs despite crude prices collapse -Baker Hughes

By Scott DiSavino
July 31 (Reuters) - U.S. energy firms added 5 oil rigs this
week after putting 21 rigs into service last week, the most in
over a year, despite a collapse in U.S. crude prices from recent
highs in June, data showed on Friday.
That was a sign some drillers followed through on plans to
add rigs announced in May and June when U.S. crude futures
CLc1 were averaging $60 a barrel. U.S. crude futures so far
this week however have traded around $48.
The rig count gain this week was the fourth increase in the
past 34 weeks, bringing the total rig count up to 664, the
highest early May, oil services company Baker Hughes (NYSE:BHI) Inc BHI.N
said in its closely followed report.
U.S. crude futures this week were on track for a fifth down
week in a row, their longest losing streak since January.
Analysts said U.S. crude futures were trading at their
lowest level since March on continuing lackluster global demand
growth and lingering oversupply concerns.
The Organization of the Petroleum Exporting Countries (OPEC)
was still flooding the international markets with oil while
United States production remains high despite a small decline in
weekly output seen last week. O/R
U.S. crude production dipped to 9.4 million barrels per day
last week after averaging around 9.6 million barrels per day for
the prior nine weeks in a row, its highest level since the early
1970s, according to government data.
Production should continue to decline in the third quarter
from the prior quarter based on rig counts, Goldman Sachs (NYSE:GS) said
in a report.
The recent slight reduction in U.S. production was an early
sign that the spending cuts energy firms started making late
last year have started to bite.
In response to a near 60 percent price collapse from $107 in
June 2014 to under $44 in January, U.S. drillers eliminated
thousands of jobs and idled 60 percent of the record high 1,609
oil rigs that were active in October.