Energy Rigs in U.S. Drop by 11 to 1,757, Baker Hughes Reports

Rigs targeting oil and natural gas in the U.S. fell by 11 this week to 1,757, according to Baker Hughes Inc. (BHI)

Oil rigs dropped 13 to 1,382, data posted on the company’s website show. The gas count rose two 374, the Houston-based field services company said.

The total count is down six from a year earlier even as domestic oil output surged to the highest level in more than two decades, boosted by new technologies. Oil output per rig in North Dakota’s Bakken formation and Texas’s Eagle Ford play are forecast to rise to records next month, the Energy Information Administration said in a Dec. 9 report.

“More horizontal drilling in the Bakken and Eagle Ford shale plays has helped propel U.S. oil production 32.7% since 2003 to a two-decade high,” Mehdi Menouar, oil and gas services analyst for Bloomberg Industries in Skillman, New Jersey, said in a research note Dec. 23. “U.S. shale development may increase demand for rigs and oil services given the high-service intensity of horizontal wells.”

U.S. oil output rose 0.7 percent to 8.11 million barrels a day in the seven days ended Dec. 20, the highest level since September 1988, according to data compiled by the EIA, the Energy Department’s statistical arm. National output grew 18 percent in the previous year, the EIA data showed.

Supply Levels

Crude stockpiles fell 4.73 million barrels last week to 367.6 million barrels, the least since Sept. 27, according to the EIA.

West Texas Intermediate crude for February delivery rose $1.03, or 1 percent, to $100.58 a barrel at 1:07 p.m. on the New York Mercantile Exchange, up 9.5 percent this year.

U.S. gas stockpiles fell 177 billion cubic feet last week to 3.071 trillion, the EIA said today. Supplies were 16 percent below year-earlier inventories.

Natural gas for January delivery slid 7.6 cents to $4.357 per million British thermal units on the Nymex, up 30 percent this year. The January futures expire at the close of floor trading today. The more-active February contract fell 8.6 cents to $4.39.

To contact the reporter on this story: Eliot Caroom in New York at ecaroom@bloomberg.net

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net

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