Drilling retreat predicted on falling prices

Traders work on the floor of the New York Stock Exchange

Price pessimism: Investment firm worried about curbs on activity

REUTERS/SCANPIX

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By News wires

 18 June 2012 21:55 GMT

Analysts at Raymond James downgraded a number of drillers, including Ensco and National Oilwell Varco, and cut its US rig count estimate for 2013 for the second time in as many months, saying companies are likely to reduce activity, which in turn can help to sustain oil price levels.

"Our increased negativity is solely predicated on the belief that significantly rising US oil production in the face of weaker global oil demand growth is on track to drive oil prices lower in 2013," Reuters reported Raymond James analysts as saying in a note.

US oil futures for July closed at $83.27 per barrel on Monday, a drop from its spike of more than $108 in March.

The brokerage lowered its expectation for US rig count by 4% to average 1946 in 2012 and by 22% to average 1696 in 2013, Reuters said.

Average…

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