American oil production continues to fall

Active rigs fell below 400 first time since 1940

The production of oil continues to fell in America. . It is the fifth straight weekly production decline.  According to Baker Hughes rigs report the number of oil and gas rigs in the US fell again this week by 34, falling to 374.  This is the lowest level of active rigs since 1940. The oil demand plummets due to lockdown in US. The oil prices fell at alarming rate and made it difficult for oil companies to pump oil at these lowest prices.

The number of oil rigs decreased for the week by 33 rigs, according to Baker Hughes data, bringing the total to 292—a 513-rig loss year over year. It is the fewest number of active oil rigs since late 2009.

The number of active rigs in the US dropped even more severely, falling 44% compared to April last year. There were 566 rigs active in the US in April, compared to 1012 at the same time last year, and 772 at the end of March, a fall of 27%.

The slowdown in economic activity coupled with growing storage surpluses has pushed oil prices down in recent weeks, meaning fewer rigs operate as drilling is less profitable. Lower rig counts usually spook traders, as it tends to signal problems with demand for oil.

The total number of active gas rigs in the United States fell by 1 according to the report, to 80. This compares to 183 a year ago.

The EIA’s estimate for the week is that oil production in the United States fell to 11.9 million barrels of oil per day on average for week ending May 1, which is 1.2 million bpd off the all-time high and a substantial 300,000 bpd lower than the week prior. It is the first sub-12 million bpd rate in the United States since February 2019.

The number of active rigs drilling oil around the world fell by 29% in April compared to the same time last year. The number of active rigs at the end of April globally was 1,514, compared to 2,140 at the same point last year.

Coronavirus has shattered demand for the fuel and made oil prices plunge to historical lows in recent days, despite a recent deal by the OPEC and its members to reduce supply by almost 10 million barrels from May.

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