U.S. oil drillers idled the most rigs since 2012 as prices slid below $55 a barrel to the lowest level in five years and a fight for market share with OPEC intensified.
Rigs targeting oil declined by 37 to 1,499 in the week ended Dec. 26, the lowest since April, Baker Hughes Inc. (BHI) said on its website yesterday, extending the three-week decline to 76. Those drilling for natural gas increased by two to 340, the Houston-based field services company said.
U.S. oil output has surged to the highest in three decades even as the Organization of Petroleum Exporting Countries resists cutting production to defend market share, exacerbating an oversupply that Qatar estimates at 2 million barrels a day. Crude has slumped by almost 50 percent this year, prompting U.S. producers including Continental Resources Inc. and ConocoPhillips to plan spending cuts.
“We should see the rig count going down at least through the end of the first quarter as a reaction to the low oil prices,” said James Williams, an economist at WTRG Economics, an energy-research firm in London, Arkansas, before the report. “By midyear, we should see measurable impacts on production.”Read more by clicking here.
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