U.S. rig count drops to 17-month low as shale operations slow

Ruth Liao and Kevin Crowley, Bloomberg August 18, 2023

(Bloomberg) –Oil drilling has collapsed to the lowest level in more than a year in the latest sign that U.S. shale operations are slowing down.

The number of oil rigs operating in the U.S. dropped by five in the past week to 520, the lowest since March 2022 and about 14% below this time last year, according to data released Friday by Baker Hughes Co. It was the ninth decline in 10 weeks.

Shale producers say they need fewer rigs because they’re becoming more efficient, but analysts have questioned whether some companies, especially privately-owed operators, are running out of drilling locations.

The U.S. crude oil benchmark, West Texas Intermediate, was trading just above $81 a barrel on Friday, or down about 10% from this time last year.

The data showed gas-directed rigs dropped by six for the week.

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