UPDATE 1-U.S. oil drillers cut rigs as crude prices collapse - Baker Hughes

(Adds analyst comment and rig counts by patch)
By Jarrett Renshaw
Sept 4 (Reuters) - U.S. energy firms cut a surprisingly
sharp 13 oil rigs this week, the first drop in seven weeks, as a
renewed slump in prices this summer forced drillers to make a
second round of cut-backs.
The decline erases weeks of small gains and brings the total
to the week ending Sept. 4 down to 662, the lowest since
mid-July, oil services company Baker Hughes (NYSE:BHI) Inc BHI.N said in
its closely followed report on Friday.
"Clearly the precipitous drop in oil prices has hit capital
expenditures for new drilling in the U.S. with today's Baker
Hughes rig count numbers. With prices remaining at relatively
low levels without much relief in sight, we are likely going to
see further declines," said Chris Jarvis, analyst at Caprock
Risk Management in Frederick, Maryland.
U.S. crude's front-month CLc1 was down about 1 percent in
early trading along with equities, but pared losses after the
rig data, trading down 5 cents at $46.70 a barrel.
Drillers cut rigs in three of the four major U.S. shale oil
basins, with a five-rig drop in the Eagle Ford in South Texas
and two in the Permian in West Texas. Producers removed one rig
in the Bakken and the count remained unchanged in the Niobrara
in Colorado and Wyoming.
The decline comes the same week new government data showed
the U.S. oil industry pumped less crude than initially estimated
this year, evidence that drillers were scaling back production
amid collapsing prices.
The revised June production data, released Monday, helped
U.S. crude prices surge as much as $3 a barrel, but the rally
was short lived.
The oil market shadowed Wall Street through most of this
week, rising and falling in tandem with stock prices.
U.S. crude futures fell from a six-month high of $61.43 in
June to $37.75 on Aug. 24, a 6-1/2-year low, due to oversupply
worries and uninspiring demand growth.
The Energy Information Administration said its new
survey-based output data showed the United States pumped a hair
below 9.3 million barrels per day in June, down by 100,000 bpd
from a revised May figure.
The June figure was also nearly 250,000 bpd below what the
EIA had estimated a few weeks ago, highlighting the steep
reversal in output as a five-year boom sours and suggesting to
some analysts that a global glut might ease sooner than
expected.