Friday, April 27, 2012

Natgas drilling rig count hits new 10-year low

Look for a count in the high 400's before the trend is over.
From Reuters:

The number of rigs drilling for natural gas in the United States fell this week to the lowest level in 10 years as historically low prices continued to force producers to slow dry gas operations.

The gas-directed rig count has dropped in 14 of the last 16 weeks, sliding 18 this week to 613, matching the number of rigs drilling for dry gas back in April 2002, data from Houston-based oil services firm Baker Hughes showed on Friday.

The count climbed last week for only the third time this year.

One of the mildest winters on record sharply cut gas demand and built up a huge surplus inventory that has steadily pressured gas prices this year.

Front-month gas futures hit a 10-year low of $1.902 per mmBtu late last week, a level that crimped producer profits and made most dry gas drilling uneconomic.....MORE