US energy firms cut the number of oil and natural gas rigs operating for the first time in 10 weeks even as producers return to the good pad with crude prices mostly trading over $40 a barrel since mid-June, Report says, citing Reuters.
The total rig count fell to a record low of 244 during the week ended Aug. 14, while oil rigs alone fell to a 15-year low of 172 in the same week, according to Baker Hughes data going back to 1940.
US oil rigs fell five to 231 this week, after rising last week to their highest since May, while gas rigs gained three to 76, their highest since July, according to Baker Hughes data.
“Following the dramatic shutdown of the US oilfield during the second quarter, the rig count is slowing rising as (exploration and production companies) become more comfortable with the (price) environment and seek to stabilize production,” James West, a senior managing director at Evercore ISI.
US crude traded around $42 a barrel this week on hopes of an effective coronavirus vaccine.
Even though the oil contract was down about 32% since the start of the year, it was still up nearly 121% over the past seven months on hopes global economies and energy demand will return when governments lift coronavirus lockdowns.