U.S. energy firms this week cut the number of oil rigs operating for the first time in three weeks week after U.S. crude production hit an all-time high, boosting exports to a record high and stockpiles to their highest in over a year.
Drillers cut four oil rigs in the week to Feb. 22, bringing the total count down to 853, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.
For the month, the rig count fell by nine. That was the first time drillers removed rigs for three months in a row since October 2017. The rig count declined by two in December and 23 in January.
The U.S. rig count, an early indicator of future output, is still higher than a year ago when 799 rigs were active after energy companies boosted spending in 2018 to capture higher prices that year.
U.S. oil output from seven major shale formations is expected to rise 84,000 barrels per day (bpd) in March to a record of about 8.4 million bpd, the U.S. Energy Information Administration said in a monthly report on Tuesday.
A shale revolution has helped boost the United States to the position of world’s biggest crude oil producer, ahead of Saudi Arabia and Russia.
Overall crude production has climbed to a weekly record of 12 million bpd, the EIA said in its latest report, mainly due to increases in the Permian, the biggest U.S. oilpatch in the United States, and the Bakken in North Dakota. Crude stockpiles have built for a fifth straight week to their highest since October 2017 and exports hit an all-time high.
In 2019, however, several drillers have said they plan to remove rigs due in part to forecasts for lower crude prices than last year.
U.S. crude futures were trading around $57.40 per barrel on Friday, after hitting their highest since mid-November. Prices were heading for a more than 3-percent weekly rise.
Looking ahead, crude futures were trading around $59 a barrel for the balance of 2019 and around $58 a barrel for the calendar 2020 .
U.S. financial services firm Cowen & Co said this week that early indications from the exploration and production (E&P) companies it tracks point to a 6 percent decline in capital expenditures for drilling and completions in 2019.
In total, Cowen said those E&P companies spent about $93.4 billion in 2018.
There were 1,047 oil and natural gas rigs active in the United States this week, according to Baker Hughes. Most rigs produce both oil and gas.