Fri Sep 9, 2011 5:26pm GMT
* Gas-drilling rig count slips for third straight week * Horizontal rigs fall after record high two week's ago (Adds price reaction, details, background) NEW YORK, Sept 9 (Reuters) - The number of rigs drilling for natural gas in the United States fell by three this week to 892, the third straight weekly decline, data from oil services firm Baker Hughes showed on Friday. Horizontal rigs -- the type most often used to extract oil or gas from shale -- fell two to 1,134 after hitting a record high of 1,140 two week's ago. Horizontal drilling rigs comprise part of the overall gas rig count. (Rig graphic: r.reuters.com/dyb62s ) Front-month U.S. natural gas futures NGc1 were unmoved by the data, remaining about 5 cents, or 1.3 percent, down at $3.93 per million British thermal units after the report. The gas rig count is 88 rigs below the same week last year. Some firms have shifted spending away from gas to more profitable liquids or oil-related ventures due to relatively low gas prices. The changes have yet to be reflected in industry data, which still show production at record levels. The U.S. Energy Information Administration expects marketed natural gas production this year to climb to a record high 65.80 billion cubic feet per day, easily eclipsing the previous high of 62.05 bcf daily in 1973. There has been record heat and power demand this summer, but traders said high gas production has easily offset the surge in cooling needs and some storm-related supply cuts. The gas rig count of 892 remains well above the 800 level some analysts say is needed to cut production significantly and tighten overall supplies. Most analysts expect no major slowdown in domestic gas output until early next year. (Reporting by Edward McAllister; Editing by Alden Bentley)
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