Oil Drilling in US Declines 28% Amid Low Crude Prices

US companies are cutting oil production amid low global crude prices. However, despite the significant reduction of drilled oil wells, the amount of new crude available is only 8.5 percent less than in June 2014.

MOSCOW (Sputnik) — The number of oil wells drilled by US companies across the country in January is 28 percent lower than in June 2014, The Wall Street Journal reported Wednesday.

According to research conducted by Rice University's Baker Institute for Public Policy, due to be released later in the day, US companies are cutting oil production amid low global crude prices, the newspaper reported.

However, despite the significant reduction of drilled oil wells, the amount of new crude available is only 8.5 percent less than in June, according to analytics company Drillinginfo.

Since summer, oil prices have fallen by almost 50 percent, and new data, according to the newspaper, indicates that US shale oil producers are responding to the decrease in prices faster than the energy companies in the past. This trend could lead to lower production levels and prompt a recovery in crude prices, the study said.

The contraction of drilling, however, is not typical for all states in the country, with some areas, such as south Texas, increasing the number of oil wells, according to the Rice University study.

Global oil prices have dropped dramatically in light of the market oversupply. In November 2014, the Organization of the Petroleum Exporting Countries (OPEC) decided against cutting oil output levels, contributing to a further decline in prices. Analysts have cited the intention of Gulf countries to drive emerging shale oil producers, such as the United States, out of the market, as the reason behind OPEC's move.