U.S. energy firms cut oil rigs for an eighth week in a row this week, the longest losing streak since June, data showed on Friday, a sign low prices continued to keep drillers away from the well pad.
Drillers removed one oil rig in the week ended Oct. 23, bringing the total rig count down to 594, the least since July 2010, after cutting a total of 80 rigs over the prior seven weeks, oil services company Baker Hughes Inc said in its closely followed report.
That total was less than half the 1,595 oil rigs in the same week a year ago. Since hitting an all-time high of 1,609 in October last year, weekly rig count reductions have averaged 19.
U.S. oil futures this week have lost about 5 percent, sliding for a second straight week, on continuing oversupply concerns even as China’s latest interest rate cut raised hopes for stronger demand from the world’s top energy consumer.
The rig count is one of several indicators traders look at in trying to figure out whether production will rise or fall over the next several months. Other factors include how fast energy firms complete previously drilled but unfinished wells and rising well efficiency and productivity.
“The current rig count implies that U.S. production would drop by 40,000 barrels a day in 2016,” analysts at Goldman Sachs said.
Despite drilling cutbacks, U.S. oil production edged up to 9.4 million barrels per day (bpd) in July from 9.3 million bpd in June, according to the latest U.S. Energy Information Administration’s (EIA) 914 production report.
On a weekly basis, the amount of U.S. oil pulled out of the ground has remained about 9.1 million bpd since the start of September, according to EIA’s weekly field production report, well below the 9.6 million-bpd peak seen in April.
(Reporting by Scott DiSavino; Editing by Marguerita Choy)
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