U.S. oil drillers cut rigs for fourth week on weak crude prices - Baker Hughes

By Scott DiSavino
Sept 25 (Reuters) - U.S. energy firms cut oil rigs for a
fourth week in a row this week, data showed on Friday, a sign
the continued weak prices were causing energy firms to reduce
drilling plans.
Drillers removed four oil rigs in the week ended Sept. 25,
bringing the total rig count down to 640, the lowest since July,
after cutting a total of 31 rigs over the three prior weeks, oil
services company Baker Hughes (NYSE:BHI) Inc BHI.N said in its closely
followed report.
That compared with 1,592 oil rigs in the same week a year
ago and an all-time high of 1,609 in October 2014.
The reductions over the past few weeks have cut into the 47
oil rigs that energy firms added in July and August after some
drillers followed through on plans to add rigs announced in May
and June when U.S. crude futures CLc1 averaged $60 a barrel.
U.S. oil futures this week however were averaging $45 a
barrel for a third week in a row, near the lowest levels for the
year on continued lackluster global demand and lingering
oversupply concerns.
Earlier on Friday, U.S. crude prices were up around 2
percent along with gains in Wall Street stock markets on
stronger revised U.S. economic data. O/R
Despite the short-term price gain on Friday, U.S. oil
production has declined over the past several weeks due to the
weak crude market.
U.S. oil output last week held around 9.1 million barrels
per day (bpd) for a third week in a row, according to government
data. That was down from average production of 9.6 million bpd
from late May to mid-July, which was the highest output since
the early 1970s.
"The current rig count is pointing to U.S. production
declining sequentially between the second quarter and the fourth
quarter of 2015 by 255 thousand barrels a day," analysts at
Goldman Sachs (NYSE:GS) said in a note.
Goldman however expects production to resume growth in 2016
by 70 thousand bpd. That however was down from the bank's
forecast last week for 2016 growth of 110 thousand bpd due in
part to continuing declines in the oil rig count.