U.S. energy firms added the most oil and natural gas rigs in a week since January even as oil prices this week pulled back from a recent 28-month high, as reported by Reuters.
The oil and gas rig count, an early indicator of future output, rose nine to 411 in the week to March 19, its highest since April, energy services firm Baker Hughes Co said in its closely followed report on Friday.
That puts the rig count, which has climbed over the past seven months, up 68% since falling to a record low of 244 in August 2020, according to Baker Hughes data going back to 1940. The total count, however, is still 361 rigs, or 47%, below this time last year.
U.S. oil rigs rose nine to 318 this week, their highest since May, while gas rigs were unchanged at 92.
More than half the U.S. oil rigs are in the Permian basin in West Texas and eastern New Mexico where total units rose four to 216 this week, the most since May.
So far this year, drillers have added 41 rigs in the Permian. That compares with no rigs added in the basin during the same period last year.
Oil output from the Permian, the top producing basin in the country, is expected to rise for a second straight month in April, the government said in a monthly forecast on Monday.
U.S. crude futures this week fell by the most since September 2020 on growing worries about rising COVID-19 cases in Europe after soaring to a 28-month high near $68 a barrel earlier this month. [O/R]
With prices mostly rising since October 2020, some energy firms have boosted spending in 2021 after cutting drilling and completion expenditures over the past two years.
That spending increase, however, remains small as firms continue to focus on boosting cash flow, reducing debt and increasing shareholder returns rather than adding to output.
U.S. financial services firm Cowen & Co said the 45 independent exploration and production (E&P) companies it tracks plan to increase spending about 2% in 2021 versus 2020. That follows capex reductions of roughly 49% in 2020 and 12% in 2019.
Reporting by Scott DiSavino; Editing by Marguerita Choy
