(Reuters) – U.S. energy companies added oil and gas rigs for the fourth week in a row for the first time since May, boosted by rising oil prices, although drilling growth has been modest, producers promoting austerity spending.
The number of oil and gas rigs, an early indicator of future production, rose by seven to 491 in the week to July 23, its highest level since April 2020, the energy services company said on Friday. Baker Hughes Co in his closely watched report.
“Although the total number of rigs is … double, the amount recorded at the low point in mid-August of last year, drilling activity remains historically low, and we would have to revert to August 2016 ( off last year) to find a lower number of platforms, ”analysts at Gelber & Associates in Houston said in a note.
U.S. oil rigs rose seven to 387 this week, their highest level since April 2020, while gas rigs were unchanged at 104.
U.S. crude futures were on course to end the week at close to $ 72 a barrel on Friday, little change from last week when it peaked in October 2018. [O/R]
With oil prices up 48% so far this year, several energy companies have said they plan to increase spending, which remains modest, however, as most companies continue to focus on increasing. improved cash flow, reduced debt and increased shareholder returns.
“Despite high oil and gas prices at times this year, drilling in many areas remains at maintenance levels. Significant rig additions are still needed to overcome natural declines and maintain production growth later this year, ”Gelber analysts said.
Baker Hughes CEO Lorenzo Simonelli predicts companies will add around 50 platforms in North America by the end of the year, with private companies resuming operations at current price levels.
Energy service companies are benefiting from a recovery in drilling driven by rising crude prices, and Schlumberger and Halliburton this week presented bullish prospects for the recovery in the oil industry.
But U.S. oil production may not reach pre-pandemic levels until 2022, said Olivier Le Peuch, CEO of Schlumberger.
Enverus, an energy data provider with its own number of closely watched platforms, said the number of active platforms jumped from 24 to 562 in the week to July 21 with the biggest increases in the Permian, from 11 to 228, and the Anadarko Basin, with an increase from eight platforms to 48.
Reporting by Scott DiSavino; Editing by Marguerita Choy