The Baker Hughes weekly North American rig count released on Friday shows a record low level of drilling activity, with only 480 active oil and gas rigs, a number unseen since recordkeeping began in the late 1940s.
As recently as 2012, the count was over four times higher, exceeding 2,000 active rigs.
Oil rigs (excluding gas) were down to 386, the twelfth straight week of declines and the lowest level seen since late 2009, the midst of the recession.
The last time that drilling activity was so low was probably in the late 1800s, said Paul Horsnell, head of commodities research at Standard Chartered, speaking to the Wall Street Journal.
Brent crude futures rose Friday, up slightly to settle above $40.
Reflecting the decline in North American shale activity, the Paris-based International Energy Agency said in a report Friday that it is cautiously optimistic that the price of crude has bottomed out and will improve from here.
Prices have fallen by 70 percent over the last year and a half, due in no small part to extraordinary productivity from American shale wells, which have added over 3 million barrels a day to worldwide supply since mid-2011; but those wells are now tailing off, says the U.S. Energy Information Agency, with U.S. production down 150,000 bpd last month, and more decline in the forecast.
That drop, combined with a global overall decline of about 200,000 bpd in February and a predicted decline of 750,000 barrels a day from non-OPEC producers this year, causes the IEA to suggest that prices will begin to recover this year.
The Agency is not sanguine on Iran's frequent announcements that it will boost exports significantly over the next several months; it believes that the Islamic Republic has the capacity to add another 200,000 barrels, but not more.