U.S. Oil Drillers Drop Rigs For Record 12th Month In A Row

U.S. Oil Drillers Decline Rigs for Record 12th Month in a Row - Finance Brokerage

U.S. oil rigs that are operating for a record 12th months in a row are set to reduce by U.S. energy firms. This week is in the sixth week of cutting rigs as producers cut spending on new drilling.

Drillers decline three oil rigs in the week of Nov. 27. It brought the average to 668, the lowest since April 27, according to Baker Hughes Co.

A year ago, in the same week, there were 887 active rigs.

In November, drillers reduced 28 oil rigs.

That puts the U.S. oil rig count on track to drop for the first time in three years. The 2019 cut, however, so far only totals 217, which is below the 2015 record 963 rig cuts, according to Baker.

The oil rig count decreased for a record 12 months in a row as independent exploration and production firms decline to spend on new drilling. Also, investors seek better returns in a low energy price environment.

U.S. Crude Futures traded about $58 per barrel.

Moreover, U.S. crude futures were trading about $56 a barrel in calendar 2020 and $53 in 2021.

U.S. financial services say that 22 of the exploration and production firms it watches reported spending estimates for 2020.

Cowen added there were 16 declines, one flat and five rises, implying a 13% decline in 2020. This puts spending on track to decrease for the second year in a row.

The producers expect to spend around $80.5 billion in 2019, compared to $84.6 billion in 2018.

The total number of U.S. oil rigs and gas rigs active in the U.S. averaged to 955. Most rigs produce both oil and gas.

Analysts at Simmons and Co. said it lowered its rig count report due to the significant contraction in land rigs over the past few weeks.

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Brent crude fell 64 cents, or 1%, at $63.42 a barrel.

Also, West Texas Intermediate crude was down 31 cents, or 0.5%, to $57.80.

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