U.S. oil drillers cut rigs for second week in three
Drillers cut one oil rig in the week to Sept. 21, bringing the total count down to 866, General Electric’s Baker Hughes said.
The U.S. rig count, an early indicator of future output, is still much higher than a year ago when 744 rigs were active as energy companies have been ramping up production in anticipation of higher prices in 2018 than previous years.
But since June, the rig count has held mostly steady at above 860 rigs as crude prices in the Permian region in western Texas and eastern New Mexico have collapsed due to a lack of pipeline infrastructure needed to transport more fuel out of the region. The Permian is the biggest shale oil formation in the United States.
Oil production in the Permian will rise 31,000 barrels per day, its slowest growth since late 2016, the Energy Information Administration said this week.
More than half the total oil rigs are in the Permian. Active units there increased by five this week to 488, the most since January 2015. ■