U.S. Oil Rig Count Lowest Since March 2011

The number of rigs drilling for oil in the United States continued to decline this week, falling 41 to 825, the lowest rig count in four years, oil services firm Baker Hughes said in its closely watched survey on Friday.

While the decline is slowing slightly from the loss of 56 rigs last week and 64 in the prior week, it remains a more robust decline than weekly cutbacks of 33 and 37 rigs seen last month.

"It was a modest slowing in the rate of decline," said Tim Evans, energy futures specialist at Citi Futures.

The number of oil rigs this week declined for a 15th week in a row, matching the longest streak for oil rig reductions set in March 2009.

Despite the reduction in oil-directed rigs by over 45 percent since hitting a record high of 1,609 in October, there are few signs U.S. production has slowed yet.

U.S. crude futures have dropped by about 60 percent since June due to concerns OPEC and the United States are producing too much oil while demand remains lackluster, forcing U.S. energy firms to cut spending and idle new wells.

Oil prices did not react to Friday's rig count although federal data due next week could show U.S. oil production was near a 40-year high, analysts said.

The Organization of the Petroleum Exporting Countries, meanwhile, said it will keep its taps open despite falling prices. More oil may soon be available from Iran as world powers work to clinch a deal with Iran over its nuclear program.

FEWEST RIGS IN TEXAS IN 6 YEARS

Producers continued to cut back the most in Texas, the state with the most rigs, and in the Permian Basin in western Texas and eastern New Mexico, the biggest and fastest-growing U.S. shale oil play.

The Permian lost 20 oil rigs to 285, the lowest rig count since data began to be collected in 2011.

Texas shed 36 rigs to 464, the lowest count since 2009.

Horizontal rigs, the most efficient type most often used in shale production, fell to the lowest since 2010, while less efficient vertical and directional rigs fell to the lowest since 1991 and 1993, respectively, according to data going back to 1991.

Canadian oil rigs meanwhile fell by 55 to just 30, the fewest since 2009.

(Reporting by Scott DiSavino in New York; Editing by Marguerita Choy, Jessica Resnick-Ault and Lisa Shumaker)