US Oil Rig Count Drops to 5-Year Low

US Oil Rig Count Drops to 5-Year Low

Rig counts for US oil drilling dropped to 614 nationwide last week, the lowest level since 2010, Bloomberg reported.

Rigs targeting natural gas also fell in the country, dropping to 809, the fewest since 2002. Rig counts are one of the most important indicators used by analysts to determine the heath of different markets. The current drop off is seen as a major correction for the industry.

“You’re certainly seeing a right-sizing of the domestic oil industry, and that’s where most of the pain has been felt,” Matt Marietta, an analyst at Stephens Inc. in Houston, Texas. “This is a step in the right direction.”

The falloff bucks the previous six-week trend, the Wall Street Journal noted, sending prices modestly up.

Prices for West Texas Intermediate Crude, the most commonly used US price index, rose nearly a dollar on the news.

The revised rig count means the industry is down about 62% from its highest point in October 2014.

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