Saturday, October 31, 2009

Natural Gas Rig Count Up by 3

NEW YORK, Oct 30 (Reuters) - The number of rigs drilling for natural gas in the United States climbed by three this week to 728, according to a report on Friday by oil services firm Baker Hughes in Houston.

The U.S. natural gas drilling rig count has gained in 13 of the last 15 weeks after bottoming at 665 on July 17, its lowest level since May 3, 2002, when there were 640 gas rigs operating.

But the rig count is still down sharply since peaking above 1,600 in September of last year, standing at 824 rigs, or 53 percent, below the same week in 2008.

Many gas producers have scaled back drilling operations with credit still tight and natural gas prices around $4 per million British thermal units (mmBtu), off nearly 70 percent from July 2008 highs above $13.

The steep declines in drilling this year have started to slow production and tighten supplies, but most traders agreed it has not been enough yet to offset record high inventories and steep recession-related cuts in demand, particularly in the industrial sector. (Reporting by Joe Silha; Editing by Lisa Shumaker)

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