U.S. oil drillers cut rigs for 10th week on low crude prices -Baker Hughes

Nov 6 (Reuters) - U.S. energy firms cut oil rigs for a tenth
week in a row this week, decreasing the pace of declines from
recent weeks, data showed on Friday, a sign low prices continued
to keep drillers away from the well pad.
Drillers removed six oil rigs in the week ended Nov. 6,
bringing the total rig count down to 572, the least since June
2010, oil services company Baker Hughes (N:BHI) Inc BHI.N said in its
closely followed report.
That is around a third of the 1,568 oil rigs operating in
same week a year ago. Over the 10 weeks, drillers cut 103 oil
rigs.
Although U.S. oil futures CLc1 have averaged $46 a barrel
so far this week, up from $45 last week, the front-month
December contract was on track to post its third weekly decline
in four as an oversupply of physical oil and a strong dollar
bedeviled the market. O/R
U.S. oil futures were down on Friday as the dollar rallied
on expectations of a rate hike before the year-end after strong
U.S. jobs growth for October.
Energy traders noted the rate of oil rig reductions over the
past two months - about 11 on average - was much lower than the
19 rigs cut on average over the past year since the number of
rigs peaked at 1,609 in October 2014, due in part to
expectations of slightly higher prices in the future.
U.S. crude futures for next year were trading around on
average almost $49 a barrel, according to the full year 2016
calendar strip CLYstc1 on the New York Mercantile Exchange.
Higher prices encourage drillers to add rigs. The most
recent time crude prices were much higher than they are now was
in May and June when U.S. futures averaged $60 a barrel.
In response to those higher prices, drillers added 47 rigs
over the summer even though crude prices had declined to an
average of $47 a barrel by the time July and August rolled
around.
The rig count is one of several indicators traders look at
in trying to figure out whether production will rise or fall
over the next several months. Other factors include how fast
energy firms complete previously drilled but unfinished wells
and recent rises in well efficiency and productivity.
U.S. oil production eased to 9.3 million barrels per day
(bpd) in August from 9.4 million bpd in July, according to the
latest U.S. Energy Information Administration's (EIA) 914
production report. urn:newsml:reuters.com:*:nL1N12U1MK
On a weekly basis, U.S. oil output edged up to 9.2 million
bpd last week after holding at 9.1 million bpd since the start
of September, according to EIA's weekly field production report.
That is still well below the 9.6 million bpd peak seen in April.