Baker Hughes count of U.S. oil rigs in operation drops to 4 year low
Drillers start to slow down production in response to cratering prices
The number of active oil rigs drilling for oil in the U.S. has fallen to its lowest level since 2010 as oil companies start to pump the brakes on oil production until prices return.
Drilling services company Baker Hughes puts out a report every week tabulating the number of active oil rigs in operation across the country. After hovering around the 200 level for years while America's conventional oil sources remained steady, the shale oil revolution saw that figure spike to an all-time high above 1,600 last October.
Since then, the price of oil has collapsed as those rigs have managed to pump out more and more oil, flooding the market with more than demand would warrant. That's set off a corresponding drop-off in the number of rigs, which fell to 734 last week. That's a decline from 760 the week before, and the lowest the number has been since December 2010.
Could dent production
After its precipitous drop since October, the U.S. oil rig count is nearing a pivotal level that experts say could dent production, bolster prices and even coax oil companies back to the well pad in coming months.
U.S. crude futures this week climbed to over $57 a barrel, the highest level this year, rebounding about 35 percent from a six-year low near $42 set in mid March, in part on expectations the lower rig count will start reducing U.S. oil output.
After rising mostly steadily since 2008, U.S. oil production has stalled near 9.4 million barrels a day since early March, according to government data. That's still the most since the early 1970s.
With files from Reuters