March 31 U.S. drillers added oil rigs for an
11th week in a row in the best quarter for boosting the rig
count since the second quarter of 2011, as a ten-month recovery
gathers pace with energy companies boosting spending on new
Drillers added 10 oil rigs in the week to March 31, bringing
the total count up to 662, the most since September 2015, energy
services firm Baker Hughes Inc said on Friday.
During the same week a year ago, there were 362 active oil
The 137 rigs added in the first quarter is the biggest boost
in a quarter since the drillers activated a record 152 rigs in
the second quarter in 2011, according to Baker Hughes data going
back to 1987.
This recent rig count increases have come despite a collapse
in U.S. crude futures this month to levels seen when the
Organization of the Petroleum Exporting Countries (OPEC) agreed
to cut production on Nov. 30.
U.S. crude futures eased to around $50 a barrel on
Friday, putting the contract on track for its worst quarter
since 2015, as investors fret that growing U.S. supplies are
undermining the OPEC-led cuts.
Since crude prices first topped $50 a barrel in May after
recovering from 13-year lows in February 2016, drillers have
added a total of 346 oil rigs in 40 of the past 44 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 2016 as U.S. crude
collapsed from over $107 a barrel in June 2014 to near $26 in
Analysts projected U.S. energy firms would boost spending on
drilling and pump more oil and natural gas from shale fields in
coming years with energy prices expected to climb.
Futures for the balance of 2017 were trading over
$51 a barrel, while calendar 2018 was fetching almost
$52 a barrel.
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 843 in 2017, 968 in 2018 and
1,079 in 2019. Most wells produce both oil and gas.
That compares with an average of 742 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 57
exploration and production (E&P) companies planned to increase
spending by an average of 50 percent in 2017 over 2016.
That expected spending increase in 2017 followed an
estimated 48 percent decline in 2016 and a 34 percent decline in
2015, Cowen said according to the 64 E&P companies it tracks.
(Reporting by Scott DiSavino; Editing by Marguerita Choy)