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U.S. rig count steady, Baker Hughes finds

Data show sector surviving low oil prices.

By
Daniel J. Graeber

DALLAS, Dec. 5 (UPI) -- While oil prices are moving near the point at which drilling may be too expensive, oil services company Baker Hughes said Friday the U.S. rig count was static.

Baker Hughes published its monthly rig count report, which reflects the number of rigs actively engaged in exploration or production. The average U.S. rig count for November was unchanged from the previous month at 1,925 and up 169 year-on-year.

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Analysts are searching for the floor price where exploration in U.S. shale is no longer economical.

Energy consultant group Wood Mackenzie finds most U.S. producers should be able to adapt to a lower price environment. It finds prices near $70 for West Texas Intermediate, the U.S. crude oil benchmark price, are a threshold level for shale, though the slump is "so far not a material threat to U.S. tight oil or the industries that surround it."

WTI prices for the first week in December 2013 averaged $96.19 per barrel. The price Friday was closer to $66 for the January contract.

Globally, Baker finds a general increase in the amount of rigs in service. The November rig count of 1,324 is up 16 from October and up 13 year-on-year.

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Shale oil is viewed as more expensive to produce than other deposits elsewhere in the world.

Oil services company Halliburton last month brokered a deal to acquire Baker Hughes.

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