July 24, 2009 / 5:12 PM / 10 years ago

U.S. natgas rig count climbs 10 to 675 for week

NEW YORK, July 24 (Reuters) - The number of rigs drilling for natural gas in the United States rose 10 this week to 675 after sinking last week to its lowest level in more than seven years, according to a report on Friday by oil services firm Baker Hughes in Houston.

U.S. natural gas drilling rigs have been in a mostly steady decline since peaking above 1,600 in September, and now stand at 880 rigs, or 57 percent, below the same week last year.

Last week, the natural gas rig count dipped to 665, its lowest level since May 3, 2002, when there were 640 gas rigs operating.

Tighter access to credit and a 70 percent slide in natural gas prices to about $3.50 per mmBtu after peaking above $13 last July have forced many producers to scale back drilling operations.

But while the steep decline in gas drilling this year has started to slow production and tighten supplies, most traders agreed it has not been enough yet to offset recession-related cuts in industrial demand and slight gains in imports of LNG.

The U.S. Energy Information Administration estimates that domestic gas production fell for a fourth straight month in June, with output dropping below the same year-ago month for the first time this year. (Reporting by Joe Silha; Editing by Marguerita Choy)

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