U.S. oil rigs saw the largest single-week drop in drilling activity in four years as low oil prices take a toll on the industry.
The number of active rigs dropped by about 44, falling to 728 this week, according to rig data provider Baker Hughes.
Oil prices have declined to around $23 a barrel, the lowest price since 2003.
As company revenues decline in the face of historically low prices, the industry may not have to funds to pay for the rigs used to drill new wells.
Without new wells drilled, oil supply in the United States will decline.
“This [scenario of slashing activity] might be just the beginning, depending on how long lower prices persist,” Linda Htein, senior research manager for energy consultancy Wood Mackenzie, said in a Thursday webinar on the current oil and gas landscape.
The drop comes as plummeting oil prices caused by a Saudi-Russian feud and the coronavirus outbreak may lead to a decline in fracking, the controversial practice that has fueled the domestic energy revolution in the U.S.
Rebecca Beitsch contributed to this report.
