We've been saying the count has to fall into the high 400's for the E&P's announced cutbacks to be taken seriously.
Platt's has 540 as a target but the number is a couple weeks old and may not take into account the gas being produced as a "byproduct" of the hunt for liquids.
The near futures were at $2.325, down 4% or 9.7 cents.
The U.S. natural gas drilling rig count fell to its lowest level since Oct. 1999as low gas prices curbed drilling in the country's shale gas outposts, data from oil services firm Baker Hughes showed on Friday.The gas-directed rig count fell by six to 588, after falling by the sameamount last week, according to the data.Gas drilling has become largely uneconomical with current prices, forcing drillers to move rigs to more lucrative oil plays. The gas-directed rig count is some 63 percent lower than the record highs in Sep. 2008.The oil rig count rose by three to a new 25-year high of 1,386 this week, according to Baker Hughes.The number of horizontal rigs, the type most often used to extract oil or gas from shale, fell by eight to 1,183 after hitting an all time high in the week to May 18.Some analysts have suggested that 600 natural gas rigs are about enough to prevent gas storage from overflowing this summer. Baker Hughes forecasts show the number of rigs drilling for natural gas in the United States will be 534 at the end of this year, down 275 from a year earlier.Other analysts argue that still deeper cuts will be needed unless unusually hot weather stokes utility demand.U.S. natural gas production in the lower 48 states fell for a second straight month in March, down 4 percent to 71.76 billion cubic feet per day (bcfd) from the 72.02 bcfd produced in February, according to data from the Energy Information Administration.The rig data did little to lift gas futures prices, which remained lower for a fifth time in six sessions.As of 1:06 p.m. EDT, front-month July natural gas futures on the New York Mercantile Exchange were at $2.341 per million British thermal units, down 8.1 cents, or more than 3 percent....MORE
As we saw yesterday the March decline should read 0.4% rather than 4 percent: