As producers slash spending on new drilling after oil prices collapsed, the US energy firms cut number of US oil and natural gas rigs operating to an all-time low for a second week in a row. Data from energy services firm Baker Hughes Co showed the rig count fell by 35 to a record low of 339 in the week to May 15. The week ended May 8 was the prior all-time low with 374 rigs.
Eastern New Mexico and West Texas own more than 50 percent of the total US oil rigs. Touching the lowest level since July 2016, active units in the region dropped by 23 last week to 175. From 2019, global fuel demand is expected to plunge roughly 10 percent in 2020.
After crude prices started to plunge due to oil price war between Saudi Arabia and Russia and the coronavirus, drillers have cut an average of 50 rigs per week since mid March.
For the rest of the year, energy firms are expected to keep chopping rigs. From an annual average of 943 in 2019, the US rig count would fall to 528 in 2020, 215 in 2021 and 221 in 2022, Simmons Energy projected.
Dropping 34 to 258 last week, US oil rigs plunged to the lowest since July 2009. Gas rigs, in the meantime, fell by one to 79, a record low according to data going back to 1987. From a record 12.2 million bpd in 2019, the US Energy Information Administration projected a fall in domestic crude output to 11.7 million bpd this year. From a record 100.7 million bpd in 2019, global petroleum and other liquid fuels consumption predicted to drop to 92.6 million bpd in 2020.
