Crude oil drillers in the United States (US) have taken a record number of oil rigs out of service in the past six weeks as member countries of the Organisation of Petroleum Exporting Countries (OPEC) keep their oil production at 30 million barrels per day (mbpd), and therefore sending prices below $50 a barrel.
Bloomberg reports that US oil rig count has fallen by 209 since December 5, 2014, the steepest six-week decline since Baker Hughes Inc. (BHI) began tracking the data in July 1987.Market reports from the website of the news medium noted that the count was down 55 this week to 1,366 and that horizontal rigs used in US shale formations that account for virtually all of the nation’s oil production growth fell by 48, the biggest single-week drop.
it quoted analysts including HSBC Holdings Plc to have said that the decline shows that OPEC countries are winning the fight for market share and slowing the growth that has propelled US oil production to the highest in at least three decades.
OPEC’s November 27, 2014 decision at its 166th General Meeting in Vienna not to curb its production output amid increasing supplies from the US and other non-OPEC countries has driven global oil prices down 58 per cent since June.”OPEC’s strategy is working, and it will be obvious in US production by midyear when growth from shale players will come to a halt,” James Williams, president of energy consulting company WTRG Economics in London, Arkansas, was quoted to have said by telephone to Bloomberg on Friday, adding, “You can imagine the impact on any industry from a 50 per cent impact on sales.” (Credits: Thisday)