(Bloomberg) -- U.S. oil explorers shut down rigs this week as concerns mounted that American drilling has expanded too much too quickly.
Working rigs drilling for crude in the U.S. dropped by five this week, bringing the total down to 747, according to Baker Hughes data released Friday. The decline wiped out half of last week’s increase in the rig fleet.
The American rig count jumped 12 percent in 2017 for the biggest annual increase since 2014. That injection of new activity has set the stage for “explosive” growth in U.S. crude production, the International Energy Agency said just hours before Baker Hughes disclosed its weekly rig tally. The IEA alarm followed OPEC’s warning on Thursday that output by non-OPEC producers will expand by 16 percent this year.
“The big concern is prices -- are they worried about prices going too high too quickly?” said Mike Wittner, head of oil-market research at Societe Generale SA in New York. “There are many reasons they’d be concerned, but top of the list is: how will U.S. production respond?”
Oil output in the U.S. rose by 258,000 barrels a day last week to 9.75 million, according to the Energy Information Administration.
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