Nov 23 U.S. oil drillers added rigs this week,
boosting the number of increments in November to the most in a
month since July, as shale producers boost spending to capture
forecast higher crude prices in coming months.
Drillers added three oil rigs in the week to Nov. 23,
bringing the total count up to 474, the most since January, but
still below the 555 rigs seen a year ago, energy services firm
Baker Hughes Inc said on Wednesday. RIG-OL-USA-BHI
Baker Hughes issued the report a couple days early due to
the U.S. Thanksgiving day holiday on Thursday.
In November alone, drillers added 33, the most in a month
Since crude prices recovered from 13-year lows to around $50
a barrel in May, drillers have added a total of 158 oil rigs in
23 of the last 26 weeks, its biggest recovery since a global oil
glut crushed the market over two years.
The 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
U.S. crude futures were trading around $48 a barrel
on Wednesday, putting the contract on track to rise for a second
week in a row on expectations the Organization of the Petroleum
Exporting Countries will agree to limit production at the end of
Analysts expect energy firms to follow through on plans to
spend more to boost drilling and production with crude expected
to rise in coming months and years.
Futures were trading near $51 a barrel for calendar 2017
and near $53 for calendar 2018,
Analysts at Simmons & Co, energy specialists at U.S.
investment bank Piper Jaffray, this week forecast the total oil
and natural gas rig count would average 505 in 2016, 697 in 2017
and 908 in 2018. Most wells produce both oil and gas.
The combined oil and gas rig count was 593 in the week ended
Nov. 23, according to Baker Hughes data.
That compares with an average of 978 oil and gas rigs active
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 18
exploration and production (E&P) companies, including Concho
Resources Inc, planned to increase spending by an
average of 36 percent in 2017 over 2016.
Cowen said that forecast 2017 increase followed an estimated
48 percent decline in 2016 and a 35 percent decline in 2015 for
the 65 E&P companies it tracks.
(Reporting by Scott DiSavino; Editing by Marguerita Choy)