The number of oil rigs in operation is falling.
Last week, the number of oil rigs in use in the US fell by 27 — to 1,893 from 1,920 the prior week — according to the latest weekly rig count from Baker Hughes.
This was the biggest single weekly drop in rig count in two years, according to Bloomberg.
In a report Friday, Bloomberg’s Lynn Doan cited comments from an oilfield services analyst who said simply: “It’s starting.”
Analyst Robert Mackenzie told Bloomberg, “We knew this day was going to come. It was only a matter of time before the rig count was going to respond.”
On Friday, West Texas Intermediate crude oil settled at around $US57.45 a barrel, the lowest since May 2009, and WTI crude is now down more than 40% from its highs made earlier this summer.
The charts of oil’s decline are stunning. And while the drop in oil rigs has been less pronounced so far, this is a chart you have to keep an eye on.