U.S. drillers pulled 94 oil rigs out of fields in a single week, the biggest retreat to date, as crude prices capped the longest stretch of monthly declines since 2009.
The oil rig count dropped to a three-year low of 1,223, Baker Hughes Inc. said on its website Friday. It was the biggest weekly decline since the Houston-based oil-field services company began collecting the data in 1987. The Permian Basin of Texas and New Mexico, the country’s biggest oil field, was hit hardest, losing 25 rigs.
Drillers are parking rigs as a global collapse in oil prices prompts producers to curb spending, service contractors to fire thousands and at least one oil-rich county in California to declare a fiscal emergency. Banks including Societe Generale SA have said prices may fall below $40 a barrel as global supplies surge and OPEC resists calls to curb output.
“The risk is that we go into a $30- to $40-a-barrel range if the market is too impatient and doesn’t want to wait for lower rig counts and lower well completions,” Mike Wittner, head of oil research at Societe Generale, said by telephone from New York on Friday. “Then you start getting below operating costs.”
West Texas Intermediate for March delivery rose $3.71 on Friday to $48.24 a barrel on the New York Mercantile Exchange. Even with the gain the futures capped a seventh straight month of declines, dropping 9.4 percent in January.Click here to read more.
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