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

By Scott DiSavino
Sept 18 (Reuters) - U.S. energy firms cut oil rigs for a
third week in a row this week, data showed on Friday, a sign the
latest crude price weakness was causing drillers to put on hold
plans announced several months ago to return to the well pad.
Drillers removed 8 rigs in the week ended Sept. 18, bringing
the total rig count down to 644, after cutting 23 rigs over the
prior two weeks, oil services company Baker Hughes (NYSE:BHI) Inc BHI.N
said in its closely followed report.
Those reductions cut into the 47 oil rigs 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 prices, however, have averaged $46 a barrel so far
this week, up a bit from the $45 average last week.
Earlier on Friday, U.S. crude prices were down more than 3
percent after the U.S. central bank warned of the health of the
global economy and bearish signs persisted that the world's
biggest crude producers would keep pumping at high levels. O/R
In response to falling prices, U.S. oil production has
declined over the past several weeks with output down to about
9.1 million barrels per day last week from an average 9.6
million bpd from late May to mid July, the highest since the
early 1970s, according to government data.
"The current rig count is pointing to U.S. production
declining sequentially between the second quarter of 2015 and
the fourth quarter by 250 thousand barrels a day," analysts at
Goldman Sachs (NYSE:GS) said in a note.
Those output reductions occurred months after U.S. energy
firms slashed spending, cut thousands of jobs and idled around
60 percent of the record 1,609 oil rigs that were active in
October 2014 as prices collapsed from around $107 a barrel in
June 2014 to under $44 in January on lackluster global demand
and lingering oversupply concerns.