Sept 27 (Reuters)
U.S. energy firms reduced the number of oil rigs this week and for a record 10th month in a row as producers follow through on plans to cut spending on new drilling this year.
Drillers cut six oil rigs in the week to Sept. 27, bringing the total count down to 713, the lowest since May 2017, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday. RIG-OL-USA-BHI
In the same week a year ago, there were 863 active rigs.
The rig count fell 29 in September, and 80 during the third quarter, the biggest quarterly decline since the first quarter of 2016.
The oil rig count, an early indicator of future output, has declined over a record 10 months as independent exploration and production companies cut spending on new drilling as they focus more on earnings growth instead of increased output.
That reduction in activity showed up in an energy survey released on Wednesday by the Federal Reserve Bank of Dallas.
Although oil production rose, service firms reported declines in activity, a sign that operators have figured out how to pull more oil from the ground with fewer rigs. Overall, the outlook from 55 oilfield services executives surveyed was negative.
U.S. oil output from seven major shale formations is expected to rise by 74,000 barrels per day (bpd) in October to a record high 8.843 million bpd, the U.S. Energy Information Administration said in its monthly drilling productivity report on Monday.