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U.S. Oil Rigs Drop as Energy Producers ‘Rightsize’ Drilling
The U.S. oil rig count declined for the fourth time in six weeks as crude futures moved below $95 a barrel and energy producers slowed their drilling programs.
The oil rig count, which has gained every quarter since March 2009, has dropped from 1,421 on June 29 as producers slowed exploration for crude and natural gas liquids. New drilling technologies have boosted crude stockpiles to 22-year highs, and crude futures, which reached $100.42 in intraday trading Sept. 14, tumbled 7.2 percent in the first four days of this week on concern that the world economy is slowing.
“We’re seeing some moderation in the rate of investment and the flow of money to rigs being put to work,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by telephone. “What we’re really trying to do here with the drilling rig count is more or less rightsize it because there is such a thing as too much all at once.”
The total count lost five to 1,859.
Oil for November delivery rose for the first time in five days, by 47 cents, or 0.5 percent, to settle at $92.89 a barrel on the New York Mercantile Exchange. Prices are down 6 percent this year.
Oil stockpiles gained 8.53 million barrels to 367.6 million in the week ended Sept. 14, the Energy Department said. Production also jumped 14 percent to 6.28 million barrels a day after drillers on the Gulf Coast restored output following Hurricane Isaac.
Natural gas for October delivery climbed 8.8 cents to settle at $2.885 per million British thermal units on the Nymex. Prices are up 52 percent from a 10-year intraday low of $1.902 in April and down 3.5 percent for the year.
Stockpiles of the fuel increased 67 billion cubic feet in the week ended Sept. 14 to 3.496 trillion cubic feet, Energy Department data showed.
California lost the most rigs, dropping by five to 37, while Pennsylvania gained the most, increasing by four to 65.
Rigs on land tumbled by seven to 1,787, the lowest count since May 20, 2011. Rigs in inland waters and miscellaneous rigs, which primarily drill for geothermal energy, were unchanged at 19 and three, respectively.
Vertical rigs dropped 16 to 508, the lowest level since March 18, 2011. Horizontal rigs gained 16 to 1,149.
Canadian energy rigs rose for the third straight week, increasing by nine to 363, the highest since March.
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