The U.S. oil and gas rig count declined by four to 1,757 this week, with a drop in natural gas rigs partially offset by rising oil drilling, according to data from Baker Hughes Inc.
The gas count dropped by eight to 420, the lowest level of 2013, data posted on Baker Hughes Inc.’s website show. Oil rigs increased by four to 1,333, the field-services company based in Houston said.
The total rig count has dropped for 11 of 14 weeks as producers become more familiar with shale plays and are able to complete more wells with fewer rigs. More efficient drilling technologies have helped drive U.S. crude production to the highest level in more than 20 years, and caused a glut of natural gas that’s put downward pressure on prices.
“What we’re seeing is the continuation of the trend -- oil drilling has reached a short-term high and should stabilize near where it is and gas drilling remains weak because prices are not high enough to justify drilling in most cases,” James Williams, president of WTRG Economics in London, Arkansas, said in a telephone interview.
The U.S. produced more than 7 million barrels of oil a day for the first time more than 20 years, the Energy Information Administration, a division of the Energy Department, said this week. Output was 7.01 million barrels a day in November, revised up from 6.89 million previously and the highest since December 1992, the agency said in a monthly supply report released Feb. 27.
U.S. oil stockpiles rose 0.3 percent to 377.5 million barrels last week and reached a 22-year high of 387.3 million in June. Oil for April delivery declined $1.37 to $90.68 a barrel on the New York Mercantile Exchange, down 17 percent from a year ago.
Oil drilling has begun to peak as shale oil fields that have contributed to surging production in the U.S. such as the Bakken, Permian and Eagle Ford basins are maturing from an early exploratory stage to development, Williams said.
Permits issued for drilling in the Permian Basin slowed for a second quarter in a row, falling 5 percent in the fourth quarter and down 8 percent from a year earlier, according to an by Bloomberg Industries.
Gas stockpiles fell 171 billion cubic feet in the week ended Feb. 22 to 2.2 trillion, according to data compiled by the EIA. They reached a record high of 3.929 trillion cubic feet on Nov. 2. Natural gas for April delivery declined 3 cents to $3.456 per million British thermal units in New York, up 40 percent from a year ago.
Louisiana lost the most rigs this week, falling by 5 to 104. New Mexico, North Dakota, Oklahoma and Pennsylvania gained the most, adding two rigs each.
Rigs on land declined by 4 to 1,757, while offshore rigs, primarily in the Gulf of Mexico, declined by 1 to 52.