New York: US oil explorers idled the fewest rigs since December, when the biggest and most prolonged retreat in drilling began.

Rigs targeting oil in the US fell by eight to 660, the smallest in 23 straight weeks of declines, according to Baker Hughes Inc.’s website. Texas’s Eagle Ford shale formation added a rig for the first time in seven weeks. The count in America’s biggest oilfield, the Permian Basin of Texas and New Mexico, fell by three to 233.

The slowdown in rig losses shows the drilling rout that curbed shale oil production and eliminated tens of thousands of jobs is nearing an end. US energy producers have already sidelined more than half of the country’s oil rigs since October, halting the oil-price slide that began last year. Futures have rebounded more than $15 a barrel in two months.

“What this is telling us is we’re near the bottom,” James Williams, president of energy consultancy WTRG Economics, said by phone on Friday from London, Arkansas. “It’s even possible that we could see an increase in rigs this month.”

US benchmark West Texas Intermediate oil for June delivery fell 36 cents to $59.52 a barrel at 2:10pm on the New York Mercantile Exchange. Prices were up 36 per cent from two months ago.

The rig count will level off in the second half of the year, “and then we see a big recovery as we go into 2016,” James West, senior managing director at New York-based Evercore ISI, said in a May 13 interview at the Mayer Brown global energy conference in Houston. “We need 1,100 oil rigs to balance the market.”

Oil will have to reach $70 a barrel before companies really start bringing rigs back into US oilfields, Greg Sharenow, executive vice president of Pacific Investment Management Co. LLC, said in an interview in New York on Thursday. Domestic production is now in a “gentle decline,” he said.

The US pumped 9.37 million barrels a day in the week ended May 8, down from the record 9.42 million reached in March, US Energy Information Administration data show. Stockpiles at Cushing, Oklahoma, the biggest US storage hub, have slid for three straight weeks.

Falling production

Even if rigs stop declining, America’s oil production is set to fall for the rest of the year, Standard Chartered Plc analysts including Nicholas Snowdon said in a research note May 11.

“It will take more than just a few rigs coming back on stream back to stop output falling,” the bank said.

While the decline in US drilling occurred “faster than we had expected,” Goldman Sachs Group Inc. said in a research note May 11 that the market remains oversupplied. “We don’t see the US rig curtailment as large enough yet to put production on a persistent downward trend,” the bank said.

The EIA forecast on May 11 that oil flowing out of tight- rock formations such as North Dakota’s Bakken and the Eagle Ford will slide 54,227 barrels a day this month. It’ll fall another 86,000 barrels in June to a five-month low of 5.56 million, the agency said.

Oil rigs in the Williston Basin, home of the Bakken, fell by one to 77 this week.

Opec output

US oil drilling subsided as the Organisation of Petroleum Exporting Countries, which accounts for about 40 per cent of the world’s oil, resists calls to curb its own output. Saudi Arabia has boosted production for two straight months to the highest level in at least three decades, data the country communicated to the OPEC’s secretariat in Vienna show.

“There can now be little doubt that Saudi Arabia is increasing production in line with higher domestic demand,” Olivier Jakob, managing director at Petromatrix GmbH, said in a emailed May 13 note from Zug, Switzerland. “US crude oil production could be hit by the drop in drilling rigs, but Opec crude oil is pushing itself for market share.”