U.S. Oil Output Drops to 16-Month Low as Spending Cuts Take Hold

U.S. crude production in February declined to a 16-month low as prices dropped to the lowest level in more than 12 years and spending cuts by drillers took hold.

Producers nationwide pumped an average 9.11 million barrels of crude a day in February, down 3.6 percent from a year earlier, the American Petroleum Institute said Thursday in a monthly report.

Oil explorers across North America have reduced spending and cut more than 100,000 workers to cope with the slump in prices. The number of active oil rigs in the U.S. dropped to 386 in the week ended Friday, the least since 2009, according to data compiled by Baker Hughes Inc.

West Texas Intermediate for April delivery rose 4.5 percent to close at $40.20 a barrel Thursday on the New York Mercantile Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term. It was the highest Settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term since Dec. 3. Futures touched $26.05 on Feb. 11, the lowest since May 2003.

Production of natural gas liquids, a byproduct of gas drilling, rose 10 percent from February 2015 to 3.41 million barrels a day, a record for the month.

Total deliveries of fuel, a measure of demand, rose 2 percent from a year earlier to the highest February total since 2008. Consumption of gasoline and jet fuel increased while demand for distillate fuel, a category including diesel and heating oil, dropped.

Gasoline consumption rose 5.2 percent from a year earlier to a record 9.1 million barrels a day. Jet fuel demand climbed 6.1 percent, while distillate fuel use slumped 17 percent during a mild winter.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net. To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Debarati Roy

By: Mark Shenk

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