U.S. energy firms cut the number of oil and natural gas rigs operating to a record low for a fifth week in a row even as some producers begin to reverse cuts as prices recover from historic lows caused by a slump in fuel demand amid coronavirus lockdowns.
The U.S. oil and gas rig count, an early indicator of future output, fell by 17, or 6%, to an all-time low of 284 in the week to June 5, according to data from energy services firm Baker Hughes Co going back to 1940.
That was 691 rigs, or 71%, below this time last year and was the fifth week in a row the U.S. count fell to a fresh record low.
U.S. oil rigs fell 16 to 206 this week, their lowest since June 2009, while gas rigs dropped by one to 76, their lowest on record according to data going to 1987.
U.S. crude futures were trading around $39 a barrel on Friday, up 132% over the past six weeks but still down 36% since the start of the year.
Shale producers Parsley Energy Inc and EOG Resources Inc on Tuesday disclosed plans to restore some or all of their output cuts. In North Dakota, state energy officials this week reduced by 7% an estimate of production shut-ins in the second-largest oil producing state.
However, production coming back online is a fraction of what has been cut, and analysts said they expect U.S. energy firms to continue chopping rigs for the rest of the year and keep the count low in 2021 and 2022.