Houston, TX — U.S. energy firms this week added oil and natural gas rigs for a fourth week in a row as producers keep returning to the wellpad with crude prices trading above $45 a barrel since late November.
The oil and gas rig count, an early indicator of future output, rose by eight to 346 in the week to Dec. 18, the highest since May, energy services firm Baker Hughes Co said in its closely followed report on Friday.
That was still 467 rigs, or 57%, below this time last year.
The number of operating rigs has surged since August, when it hit a record low of 244, according to Baker Hughes data going back to 1940.
U.S. oil rigs rose by five to 263 this week, their highest since May, while gas rigs rose by two to 81, their highest since May, according to Baker Hughes data.
More than half the U.S. oil rigs are in the Permian basin in West Texas and eastern New Mexico where total units rose six to 174 this week, the most since May. That put the rig count in the basin up for a ninth week in a row for the first time since June 2017.
U.S. crude traded at around $49 a barrel this week, its highest levels since February.
Even though the oil contract was down about 20% since the start of the year, it was still up about 160% over the past eight months on hopes global economies and energy demand will return as more governments relax coronavirus lockdowns.
US oil market shows right trend at a slow pace
Simmons Energy, energy specialists at U.S. investment bank Piper Sandler, forecast the U.S. rig count would fall from an annual average of 943 in 2019 to 431 in 2020 and 369 in 2021, before rising to 567 in 2022.
That compares with Simmons previous forecast for an average of 326 rigs in 2021 and 583 in 2022.
*Scott DiSavino; Editing: Susan Fenton – Reuters
