Sept. 27 (Bloomberg) -- Energy rigs in the U.S. fell to the lowest level since April as growth driven by the initial exploration of U.S. shale basins moderated and drillers became more efficient.
Total rigs slid by 17 to 1,744 this week, Baker Hughes Inc., a Houston-based field-services company, said on its website. Oil rigs declined by seven to 1,362. Gas rigs dropped by 10 to 376. The miscellaneous rig count was unchanged at six.
“The U.S. onshore market is taking a breather in 2013” after three years of rapid growth, James West, an oilfield services analyst for Barclays Plc in New York, wrote in a Sept. 23 research note.
Exploitation of shale basins using hydraulic fracturing and horizontal drilling techniques has pushed U.S. crude output to its highest level since 1989. The resurgence in production helped the U.S. meet 87 percent of its energy needs in the first five months of 2013, on pace to be the highest annual rate since 1986, according to the Energy Information Administration.
Oil rigs are down 3.4 percent in the past year even as crude output reached a 24-year high this month. Increased knowledge about U.S. shale basins is letting producers get more oil per well drilled, said James Williams, president of WTRG Economics in London, Arkansas.
“We’re seeing increased efficiency, clearly, both because they know more about the formations and also they are drilling smarter,” Williams said in a phone interview.
U.S. oil output was 7.77 million barrels a day last week, according to the EIA, the Energy Department’s statistical arm. The previous week’s output of 7.83 million was the most since May 1989.
West said he expects a surge in demand for deepwater drilling in the Gulf of Mexico in coming months.
Recent discoveries are “leading to an acceleration of operator interest in the U.S. GOM not seen since the lifting of the deepwater moratorium in late 2010,” he wrote.
Gulf rigs slid by one to 62 last week, Baker Hughes said. Gulf production was 1.07 million barrels a day in June, down 2.4 percent from a year earlier, according to the EIA.
Crude for November delivery declined 16 cents to settle at $102.87 a barrel on the New York Mercantile Exchange. Prices, which dropped 1.7 percent this week, have advanced 12 percent in the past year.
Natural gas rigs dropped to a two-month low. Prices are still too low to justify drilling, Williams said.
Natural gas for November delivery rose 2.2 cents, or 0.6 percent to $3.589 per million British thermal units today on the Nymex. That’s down 2.7 percent from last week and up 8.9 percent in the past year.
U.S. gas stockpiles gained 87 billion cubic feet last week to 3.386 trillion, the EIA, the Energy Department’s statistical arm, reported yesterday. Supplies were 5 percent below year-earlier levels and 0.9 percent above the five-year average.
To contact the reporter on this story: Edward Welsch in Calgary at email@example.com
To contact the editor responsible for this story: Dan Stets at firstname.lastname@example.org