U.S. Energy Rig Count Rises by Nine to 1,771, Baker Hughes Says

The U.S. energy rig count increased by nine to 1,771 this week, Baker Hughes Inc. (BHI) said on its website.

Natural gas rigs were unchanged at 354, near the 18-year low of 350 set May 10, according to data posted by the Houston-based oilfield-services company. Oil rigs rose by eight to 1,410. Total energy rigs reached a seven-week high.

Hydraulic fracturing and improvements in drilling have triggered a surge in gas output that depressed prices and created a supply glut, weakening demand for new gas rigs. The Energy Department conditionally approved the Freeport LNG project this month to send gas overseas.

Natural gas for July delivery was little changed at $4.024 per million British thermal units at 1:11 p.m. on the New York Mercantile Exchange, up 66 percent from a year ago.

U.S. gas stockpiles gained 88 billion cubic feet to 2.141 trillion in the week ended May 24, below the five-year average injection of 92 billion, the Energy Information Administration, the Energy Department’s statistical arm, said yesterday. Supplies were 23.7 percent below year-earlier inventories, versus 24.9 percent in last week’s report.

U.S. oil output climbed 0.5 percent to 7.29 million barrels a day last week, EIA data show. Production reached 7.37 million barrels a day in the week ended May 3, the most since February 1992. Stockpiles also climbed last week, by 0.8 percent to 397.6 million barrels, the most since the agency began gathering weekly data in 1982.

Crude for July delivery fell 67 cents, or 0.7 percent, to $92.94 a barrel today on the Nymex. Prices have gained 7.4 percent in the past year.

Oil futures have traded as much as 24 times higher than gas futures this month, compared with a 10-year average of 15 times, according to data compiled by Bloomberg.

To contact the reporters on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net; Richard Stubbe in Houston at rstubbe1@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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