US energy firms this week cut the most oil rigs in about four months, with the rig count falling to the lowest since January 2018, as producers cut spending on new drilling and completions.

Drillers cut 16 oil rigs in the week to Aug. 23, the deepest cut since the week of April 26 and the seventh weekly decline in the past eight weeks, General Electric Co’s Baker Hughes energy services firm said in its closely followed report.

The total count was down to 754 from 860 active rigs in the same week a year ago.

The oil rig count, an early indicator of future output, has declined over the past eight months as independent exploration and production companies cut spending on new drilling as they focus more on earnings growth instead of increased output.

The number of oil and gas wells in Texas readied for production fell nearly 12 per cent in the first seven months of 2019 compared with the same time last, according to data from the state energy regulator, as activity dropped on concerns of slowing demand and oversupply. US crude futures traded around $53 per barrel and was set for a weekly decline on the back of an escalating US-China trade conflict.

Looking ahead, US crude futures were trading around $53 a barrel for the balance of 2019 and about $51 in calendar 2020.

US financial services firm Cowen & Co said projections from the exploration and production (E&P) companies it tracks point to a 5 per cent decline in capital expenditures.