Oil rigs in the U.S. rose for the first time in eight weeks as energy producers moved equipment from gas plays to focus on crude and liquids drilling.
Oil rigs rose by five to 1,323, the first advance since Nov. 16, data posted on Baker Hughes Inc.’s website showed. The gas count dropped five to 434, the field-services company based in Houston said. Miscellaneous rigs fell by one to four.
“Oil rigs are certainly reflecting that oil prices are better than gas right now,” James Williams, president of WTRG Economics in London, Arkansas, said by telephone. “It’s too soon to tell whether oil rigs will keep rising. I think we’ll see them stay kind of flat for a while.”
Oil rigs have fallen every month since September as companies, responding to high crude supplies and a decline in prices, scaled back their drilling programs. Crude production from North Dakota’s Bakken shale formation dropped in November for the first time in more than a year. The gas count has shrunk to less than a third of its peak in August 2008 after a shift from dry-gas plays to liquids.
Total energy rigs fell for the seventh week, slipping by one to 1,761. The count has lost 50 rigs since Nov. 30.
Crude for February delivery on the New York Mercantile Exchange fell 26 cents to settle at $93.56 a barrel. Prices are down 7.2 percent from a year ago.
U.S. oil production rose 17,000 barrels a day to 7 million last week, the most in almost 20 years, according to the U.S. Energy Information Administration. Stockpiles climbed 0.4 percent to 361.3 million barrels in that same period, the Energy Department agency said. Supplies reached a 22-year high of 387.3 million barrels in June.
Production from North Dakota’s Bakken shale play declined 2.2 percent from October to 669,000 barrels a day, according to the North Dakota Industrial Commission. It was the first month-to-month drop since April 2011.
Natural gas for February delivery gained 13.4 cents to settle at $3.327 per million British thermal units on the Nymex. Futures are up 20 percent from a year ago.
Pennsylvania lost the most rigs this week, dropping six to 67. Louisiana gained the most, increasing five to 107.
Rigs on land were unchanged at 1,691. Rigs in inland waters fell by three to 17.
Vertical rigs tumbled by 20 to 460, the lowest since February 2010. Horizontal rigs climbed by seven to 1,119, the highest since October.
The offshore rig count, primarily in the Gulf of Mexico, gained two to 53.
Canadian energy rigs jumped for a second week, increasing by 273 to 531, the highest level since March. The count in Canada has risen in January by an average of 296 for the past 10 years.