U.S. Energy Rigs Decline by 14, Baker Hughes Reports

Rigs targeting oil and natural gas in the U.S. declined by 14 this week to 1,771, according to Baker Hughes Inc. (BHI)

Oil rigs fell by six to 1,416, data posted on the company’s website show. The gas count dropped by seven to 351, the Houston-based field services company said. Miscellaneous rigs slipped by one to four.

The total U.S. rig count slid amid frosty weather and storms that swept across the U.S. this week, freezing gas wells and sending spot prices of the fuel in some regions to record-highs. Chesapeake Energy Corp. (CHK), the second-largest natural gas producer in the U.S., said yesterday that output has dropped due to “winter weather challenges” since December.

“We anticipate that the fourth-quarter 2013 and first-quarter 2014 timeframe will mark our production low point and that we will see a significant quarter-to-quarter ramp up beginning in the second quarter,” Doug Lawler, the company’s chief executive officer, said in a conference call with analysts yesterday.

U.S. gas stockpiles fell 262 billion cubic feet in the week ended Jan. 31 to 1.923 trillion, more than the five-year average drop of 151 billion, according to the Energy Information Administration, the Energy Department’s statistical unit. Supplies were 28.8 percent below year-earlier levels.

Natural gas for March delivery fell 12.7 cents, or 2.6 percent, to $4.804 per million British thermal units on the Nymex, up 46 percent from a year ago.

U.S. oil output was unchanged at 8.04 million barrels a day last week after climbing in January to the highest level since 1988, the EIA said. Crude stockpiles climbed 440,000 barrels to 358.1 million.

West Texas Intermediate crude for March delivery increased $1.16, or 1.2 percent, to $99 a barrel at 1:07 p.m. on the New York Mercantile Exchange, up 3.3 percent in the past year.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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