UPDATE 2-U.S. natgas rig count down 2 at 951--Baker Hughes

NEW YORK, May 14 (Reuters) - The number of rigs drilling for natural gas in the United States fell by two rigs this week to 951, according to a report on Friday by oil services firm Baker Hughes in Houston.
The gas drilling rig count hit a 14-month high of 973 on April 16 but has declined in three out of the last four weeks.
U.S. natural gas futures, which were down about 4 cents just before the report, were about 2 cents lower at about $4.32 per million British thermal units after the data was released.


The U.S. natural gas drilling rig count is up 286, or 43 percent, since bottoming at 665 on July 17, its lowest level since May 3, 2002, when there were 640 active gas rigs.
While the gas rig count is well off its peak above 1,600 in September 2008, it still stands 223 rigs, or 31 percent, above the same week last year.
With gas prices still down nearly 30 percent since peaking above $6 in early January, some analysts expect to see further cuts in drilling, noting current prices were no longer a strong incentive to start new wells.
The break-even point for some key shale basins like Haynesville in Louisiana and Marcellus in Appalachia ranges between $3.50 and $4, according to some analysts.
A number of producers have said they would reduce spending for gas drilling this year and focus instead on more profitable oil prospects.
Some traders said more rig cuts may be necessary to balance an oversupplied gas market unless demand, particularly from the industrial sector, shows stronger signs of recovery with the economy.

(Reporting by Joe Silha; Editing by Rebekah Kebede and Jim Marshall) Keywords: ENERGY NATGAS/RIGS (joe.silha@thomsonreuters.com; +1 646 223 6071 Reuters Messaging; joe.silha.reuters.com@reuters.net)

Source: http://www.iii.co.uk/news/?type=afxnews&articleid=7894937&action=article

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