U.S. Oil Rig Count Drops Below 1,000 for First Time Since June 2011

By Angela Chen 

The U.S. oil-rig count fell by 33 to 986 in the latest week, according to Baker Hughes Inc., dropping below 1,000 for the first time since June 2011.

The number of active rigs has declined for 12 straight weeks. In comparison, there were 1,609 rigs in October.

Oil prices have staged an uneven rebound in recent weeks, helped in part by the data series, which seems to suggest lower oil prices are leading companies to drill less--which could eventually help end the supply glut that has sent oil prices down by about 50% from their peak last June.

As the number of oil drilling rigs in the U.S. continues to fall, JBC Energy estimated this week that the drop should result in crude output falling by 200,000 to 250,000 barrels a day in the second half of this year.

Oil futures slightly pared their gains following the data's release. Brent was up 2.2% to $61.29 a barrel in midday trading and had previously been up more than 3%.

According to Baker Hughes, gas rigs were down nine to 280 this week. The U.S. offshore rig count is at 51, down three rigs from last week and down four from the same period in the year-earlier period.

For all U.S. rigs, including natural gas, the week's drop was 43 to 1,267. Compared with a year ago, this week's number is down 502.

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