Drillers lay down U.S. rigs as oil volatility crushes plans

HOUSTON (Bloomberg) -- Oil explorers dialed back on drilling at the fastest pace in 2 1/2 years in U.S. fields as volatile crude prices crippled efforts to plan for growth.

Working oil rigs fell by 10 this week to 877, according to data released Friday by oilfield-services provider Baker Hughes, a GE company. The last time the rig fleet shrank by a larger margin was April 2016. The number of rigs operating in America’s busiest region, the Permian Basin of West Texas and New Mexico, dropped by 4, marking the biggest drop since June.

Schlumberger Ltd., the world’s biggest oilfield services provider, told investors this week it’s seeing stagnant North American onshore drilling activity.

“The price of oil is dominating the headlines in our industry, with a level of volatility that has brought increased uncertainty and decreased visibility,” Patrick Schorn, executive V.P. for wells at Schlumberger said at a conference in New York. “Presenting any reliable outlook for our business is like walking a tightrope.”

Crude producers in the U.S. are pumping a record 11.7 MMbpd, according to the Energy Information Administration. West Texas Intermediate, the U.S. benchmark crude, rose 4.3% to $53.71 at 1:29 p.m. in New York.