Rig counts down 20 percent

HOUSTON, Jan. 8 (UPI) -- Oil field services company Baker Hughes said Friday the international rig count for December was down nearly 20 percent from 2014 levels.

In its much-watched monthly report, Baker Hughes said the international rig count for December was 1,095, lower than the December 2014 count by 18.5 percent. From November, the rig count was down 6 percent.

Crude oil prices have moved steadily lower since mid-2014 when major indices like Brent and West Texas Intermediate first dipped below $100 per barrel. Brent, the global benchmark price, is now trading below $40 per barrel for the first time in about a decade.

Lower crude oil prices means less capital is available for energy companies for investment in exploration and production, and a decline in rig activity is used as a barometer to gauge the health of the energy sector.

The Organization of Petroleum Exporting Countries said in its annual report, published in December, that rig counts have fallen dramatically as companies work to control cost in the current market.

OPEC said rig counts may not be a reliable indicator of trends in production, however, because of a variety of factors, ranging from rig type to efficiency. Its annual report said a better indicator would be the number of wells drilled and completed.

"Recent data shows that the number of completed wells is generally decreasing in all plays," OPEC's report read.

Declines in rig activity have yet to be mirrored by production figures. In the United States, federal data show total crude oil production of 9.2 million barrels per day for the week ending Jan. 1. That's an increase of 0.1 percent from the previous week and almost 1 percent higher than the same week last year.

Baker Hughes said the average U.S. rig count for December was 714, down 62 percent from the previous year.