Baker Hughes U.S. Drillers Report Reveals 9 Oil Rigs Lost Drilling Contracts
U.S. energy company Baker Hughes reports a cut of nine oil drilling rigs this week, the largest reduction since May 2016, following a recent drop in oil prices. The oil rig count fell to 860 in the week ending August 24, the company, Baker Hughes, a subsidiary of General Electric, reported in its report published on Friday (24). U.S. crude oil futures trading around $69 per barrel have fallen about 7% so far this quarter, leading to the first quarterly decline since the second quarter of last year.
Reflections on the Global Market
This week’s prices end a streak of seven consecutive declines, and sanctions on Iran may limit global supply as a trade war may not dampen Chinese appetite for U.S. oil. The count of U.S. rigs serves as a leading indicator of future production. Exactly one year ago, 759 rigs were active, and following increased production and coordinated efforts with OPEC (Organization of the Petroleum Exporting Countries), energy companies have been able to boost the number of offshore units. So far, U.S. oil averages $66.33 per barrel compared to averages of $50.85 in 2017 and $43.47 in 2016. Looking ahead, oil is projected to trade at $69 for the remainder of 2018 and $66 for the 2019 calendar year.
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Looking Ahead
Simmons & Co analysts predict that the total count of oil and natural gas rigs will increase from 876 to 1,031 in 2018, 1,092 in 2019, and 1,227 in 2020. So far, the total number of active oil and gas rigs in the United States has reached an average of 1,014. This keeps the total count for 2018 on track to be the highest since 2014, with an average of 1,862 rigs. Most rigs produce oil and gas.

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