The Number Of US Oil Rigs In Operation Just Dropped By The Most In Two Years

The number of oil rigs in operation is falling.

Last week, the number of oil rigs in use in the US fell by 27 - to 1,893 from 1,920 the prior week - according to the latest weekly rig count from Baker Hughes. 

This was the biggest single weekly drop in rig count in two years, according to Bloomberg. 

In a report Friday, Bloomberg's Lynn Doan cited comments from an oilfield services analyst who said simply: "It's starting."

Analyst Robert Mackenzie told Bloomberg, "We knew this day was going to come. It was only a matter of time before the rig count was going to respond."

On Friday, West Texas Intermediate crude oil settled at around $57.45 a barrel, the lowest since May 2009, and WTI crude is now down more than 40% from its highs made earlier this summer.

The decline in oil prices has been blamed on a glut of international supply, as US crude oil production is at its highest level since 1986 and OPEC has said it won't move to curb production. 

Meanwhile, both the International Energy Agency and OPEC recently reduced their oil demand forecasts for next year.

The charts of oil's decline are stunning. And while the drop in oil rigs has been less pronounced so far, this is a chart you have to keep an eye on.