U.S. energy firms cut the number of oil and natural gas rigs operating to a record low for a 10th week in a row but the rate of decline has slowed as higher oil prices prompt some producers to start drilling again.
The U.S. oil and gas rig count, an early indicator of future output, fell by five to an all-time low of 258 in the week to July 10, according to data from energy services firm Baker Hughes Co. going back to 1940.
That was 700 rigs, or 73%, below this time last year.
U.S. oil rigs fell by four to 181 this week, their lowest since June 2009, while gas rigs dropped by one to 75, matching its record low hit a couple of weeks ago, according to data going back to 1987.
The U.S. Energy Information Administration (EIA) projected a fall in domestic crude output to 11.6 MMbbl/d this year from a record 12.2 MMbbl/d in 2019, while global petroleum and other liquid fuels consumption will drop to 92.9 MMbbl/d in 2020 from a record 101.0 MMbbl/d in 2019.
Even though U.S. oil prices are still down about 34% since the start of the year due to coronavirus demand destruction, U.S. crude futures have jumped 113% over the past three months to about $40 per barrel July 10 on hopes global economies will snap back as governments lift lockdowns.
Analysts said higher oil prices will encourage energy firms to slow rig count reductions and possibly start adding some units later this year.
U.S. energy firms cut the number of oil and gas rigs over the past week to a record low for a 14th week even as higher oil prices prompt some producers to start drilling again.
The move comes as the November presidential election looms and the Trump administration aims to complete several more deregulatory actions on the spring Unifed Agenda, a list of its policy priorities.
The U.S. oil and gas rig count fell by four to an all-time low of 247 in the week to Aug. 7, according to data from energy services firm Baker Hughes Co.