It was just a matter of time...Drillers Facing Sub-$60 Oil Cut Oil Rigs to 6-Month Low
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By Lynn Doan and Jessica SummersDec 19, 2014 5:20 PM ET
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Drillers cut the number of rigs targeting U.S. oil to the lowest level in six months as crude traded below $60 a barrel for the seventh straight day and OPEC resisted calls to curb production..
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Rigs targeting oil declined by 10 to 1,536,
Baker Hughes Inc. (BHI) said on its website today. Those seeking out natural gas fell by eight to 338, the Houston-based field services company’s website. The total count lost 18 to 1,875, the lowest level since July.
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The number of rigs targeting U.S. oil has slid from a record 1,609 as drillers retrench in response to escalating competition from the world’s largest suppliers that’s sent international oil prices plummeting by more than $50 a barrel. Eight hundred more rigs are at risk of being idled should prices remain where they are, suspending an unprecedented boom in domestic production that’s brought the nation closer to energy independence than it’s been in three decades.
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The mindset of U.S. energy explorers has “drastically changed” after the recent $15- to $20-a-barrel drop in
oil prices, Tudor Pickering Holt & Co. said in an e-mailed note yesterday. “Rigs are likely to fall out of the market at a steeper pace with drops starting to gain momentum early next year.”