Shale boom falters as oil lingers near $45 amid stubborn glut

Shale explorers reduced the number of rigs drilling for oil in the US this week, snapping a record expansion in a sign the boom may be waning as prices linger near $45 a barrel.Working rigs targeting crude fell by 2, bringing the total to 756, according to Baker Hughes data reported on Friday. The reduction ended 23 straight weeks of rig additions, the longest stretch of uninterrupted growth on records dating back to 1987. Before last week, the rig count more than doubled from a low of 316 in May 2016 as shale explorers ramped up production.“There were so many rigs added earlier this year that the pace is not sustainable,” Brian Youngberg, energy analyst at Edward Jones & Co, said by phone. “If oil stays in the 40s we will definitely see a slowdown.”The price of West Texas Intermediate, the US benchmark, extended its seven-day rebound last week from the previous week’s doldrums and rallied on the rig count news to trade as high as $45.92 a barrel in New York. Prices were also boosted by a reduction in US crude production of 100,000 bpd to 9.25mn reported on Wednesday.US shale producers have been adding rigs in 2017 even as prices weakened on concerns about oversupplies. Opec’s decision in May to extend output cuts implemented last year did little to boost the market. US shale fields have been increasing output thanks to lower production costs that help them maintain profits at lower prices. But the drop last week may be a sign explorers are being more cautious.