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Producers may shut down over 500 rigs as oil plummets

More than 500 rigs could be shut down over the coming months due to the steady drop in oil prices, according to analysts.

The Houston Chronicle reports that up to 550 drilling rigs at shale formations may be sidelined.

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Baker Hughes estimated that Texas drilling rigs led the U.S. in a 1.4 percent weekly decline in its rig count.

“We think there’s a significant amount of pain coming” to the oil industry and its service companies next year, Praveen Narra, an analyst with Raymond James, told the Chronicle.

Additionally in November the U.S. saw a 40 percent decline in new well permits issued in the Permian Basin and Eagle Ford in Texas and North Dakota’s Bakken formations.