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Rig count falls to lowest since 2017 as prices stay stuck in ‘purgatory’

The number of operating drilling rigs in the United States fell below 900 this week for the first time since 2017 as oilfield activity continues to slow and crude prices remain in a sort of purgatory between $50 and $60 per barrel.

The oil industry could continue to weaken through 2020 unless a global recession is avoided and OPEC and its allies extend their production cuts for all of next year, according to an analysis Friday from the Norwegian research firm Rystad Energy.

Despite record-high U.S. oil and gas production, the energy sector has struggled since late last year because of lower oil prices, skeptical investors, weakening global oil demand and a slow, but steady reduction in drilling activity.

The industry generally needs oil priced near $60 per barrel or higher on a consistent basis to be considered healthy, but crude prices remain comfortably below that threshold. Oil settled at $56.62 a barrel in New York Friday.

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