Recent data released on Monday morning indicates that U.S. drilling has slowed. Further reports state that the country had planned $1.5 trillion worth of drilling but the planned production is now deemed uneconomical following lower oil prices around the world.
The news caused oil prices to rise 2% on Monday morning.
Crude oil prices have dropped by more than half this past year as demand slowed and production remained steady. Oil prices have dropped significantly in the United States as a result.
Drillers have reduced their number of rigs for three straight weeks.
U.S. light crude oil futures are up $1.15 on the day to $45.83 a barrel. The global benchmark for crude oil is up $1.19 on the day to $48.66 a barrel. The bearish market is indicated by the number of rigs declining in recent weeks.
Goldman Sachs (GS) reported that a decline in U.S. oil production has occurred between the second and fourth quarter. The investment bank states that production has fallen by as much as 250,000 barrels a day.
Analysts project that the lower oil prices will have a long-term impact on production levels.
Despite the decline in oil production, analysts suggest that the price for oil will remain at low levels due to steady production in Russia and the Middle East.