The fall in the U.S. oil rig count slowed this week, data showed on Friday, suggesting the collapse in drilling may be coming to an end as prices recover after falling 60 % from June to March.
The number of rigs drilling for oil fell by 11 this week to 668 active rigs, the smallest drop since early April, after declining 24 and 31 rigs in the prior two weeks, oil services firm Baker Hughes Inc said in its closely-watched report.
With the oil rig decline this week, the number of active rigs has fallen for a record 22 weeks in a row to the fewest since September 2010, according to Baker Hughes data going back to 1987.
Since the number of oil rigs peaked at 1,609 in October, producers have reacted quickly to the steep drop in oil prices since the summer by cutting spending, eliminating jobs and idling more than half of the country’s rigs.
The U.S. oil rig count, however, is nearing a pivotal level that experts say is helping to bolster prices and trim production, and will eventually coax oil companies back to the well pad in coming months.
Several oil drillers this week said they would boost production this year if oil prices continue to rise, including EOG Resources Inc, Concho Resources Inc and Devon Energy Corp.
U.S. crude futures this week climbed to over $62 a barrel, the highest level this year, helped by a weaker dollar and bets a supply glut would ease as the falling rig count will start to reduce oil output.
That is a 48 % rebound from the $42 six-year low set in March on oversupply concerns and lackluster demand.
After rising mostly steadily since 2009, U.S. oil production has stalled near 9.4 million barrels a day since early March, the highest level since the early 1970s, according to government data. – Reuters