04 February 2017, Houston — U.S. energy companies added oil rigs for a 13th week in the last 14, extending a nine-month recovery as drillers take advantage of crude prices that have held mostly over $50 a barrel since OPEC agreed to cut supplies in late November.
Drillers added 17 oil rigs in the week to Feb. 3, bringing the total count up to 583, the most since October 2015, energy services firm Baker Hughes Inc said on Friday.
During the same week a year ago, there were 467 active oil rigs.
Since crude prices first topped $50 a barrel in May after recovering from 13-year lows last February, drillers have added a total of 267 oil rigs in 32 of the past 36 weeks, the biggest recovery in rigs since a global oil glut crushed the market over two years starting in mid-2014.
Baker Hughes oil rig count plunged from a record 1,609 in October 2014 to a six-year low of 316 in May as U.S. crude collapsed from over $107 a barrel in June 2014 to near $26 in February 2016.
U.S. crude futures were trading around $54 a barrel on Friday and set for a seventh weekly increase in the last eight as the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers follow through on plans to reduce production in an effort to end a global oil glut and raise prices. [O/R]
Analysts said they expect U.S. energy firms to boost spending on drilling and pump more oil and natural gas from shale fields in coming years now that energy prices are projected to keep climbing.
Futures for the balance of 2017 were trading around $55 a barrel, while calendar 2018 was fetching almost $56.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast the total oil and gas rig count would average 795 in 2017, 911 in 2018 and 1,022 in 2019. Most wells produce both oil and gas.
That compares with an average of 692 so far in 2017, 509 in 2016 and 978 in 2015, according to Baker Hughes data.
Analysts at U.S. financial services firm Cowen & Co said in a note this week that its capital expenditure tracking showed 31 exploration and production (E&P) companies planned to increase spending by an average of 36 percent in 2017 over 2016.
That spending increase in 2017 followed an estimated 45 percent decline in 2016 and a 37 percent decline in 2015, Cowen said according to the 65 E&P companies it tracks.
*Scott DiSavino; Editing: Meredith Mazzilli & Chizu Nomiyama – Reuters