Rig count slides amid signs of slowing shale boom

The U.S. drilling rig count fell for the third time in three weeks as oil prices continued to stagnate amid signs that the latest shale boom is beginning to slow.

Energy companies pulled two oil rigs and two gas rigs out of U.S. fields, Houston oil field services company Baker Hughes reported Friday. The number operating rigs has shrunk by 22 since hitting a peak of 958 at the end of the July.

Drilling in U.S. oil and gas fields rebounded strongly — particularly in the prolific Permian Basin in West Texas — after oil prices hit bottom at about $26 a barrel early last year and began a steady recovery. Crude prices, however, have been largely stuck in recent months between $40 and $50 a barrel, occasionally breaking above the $50 level but retreating.

Oil prices, in fact, had stayed above $50 a barrel for two weeks, before diving by 3 percent Friday to close at $49.29 a barrel as markets again focused on stubbornly high global supplies. U.S. production recently hit a two-year high while OPEC nations increased their overall output last month.

The stubbornly low prices appear to have helped slow the land rush in the Permian Basin. With rising production costs, high acreage prices and a shareholder push for financial discipline, exploration and production companies are moving far more cautiously in making acquisitions.

Drillers spent $35 billion to buy property in West Texas over a nine-month period that ended in early spring. By comparison, the collective value of land deals of the past six months is less than $5 billion, energy research firm Wood Mackenzie reports.

Drillers pulled three rigs out of Texas this week, while Wyoming and Pennsylvania lost two rigs and Louisiana one, Baker Hughes said. Colorado and Oklahoma each added rigs.