Jan. 25 (Bloomberg) -- The natural gas rig count in the U.S. rose for the third straight month as a rebound in prices draws energy producers back to dry-gas plays.
The gas count rose by five to 434, the highest level in three weeks, data posted on Baker Hughes Inc.’s website show. Oil rigs dropped by one to 1,315, the field-services company based in Houston said. Total energy rigs rose by four to 1,753, the first increase since Nov. 23.
Gas rigs have gained four out of the past six weeks as producers respond to a 27 percent increase in futures prices over the past year. The count reached a 13-year low in November after stockpiles of the fuel rose to a record and companies switched from dry-gas plays to more lucrative oil and liquids drilling.
“Gas prices are at a point where some of the formations are economic to drill,” James Williams, president of WTRG Economics in London, Arkansas, said by telephone. “We probably won’t see any major increases until we hit $4 gas.”
Natural gas for February delivery declined 1.8 cents to $3.464 per million British thermal units on the New York Mercantile Exchange at 1:40 p.m. Future settled below $2 per million British thermal units in April for the first time in 10 years.
Gas stockpiles fell 172 billion cubic feet last week to 2.996 trillion, the EIA said yesterday. They reached a record high of 3.929 trillion cubic feet on Nov. 2.
The total U.S. energy rig count has dropped from 2,008 a year ago as technological advances in drilling yield more output from wells, weakening producers’ appetite for new rigs. Crude production rose this month to the highest level since 1993, and stockpiles of the feedstock grew in June to the largest in 22 years.
Total rigs in the U.S. are expected to drop 5 percent this year, remaining “flat” during the first quarter, Peter Ragauss, Baker Hughes’ chief financial officer, said during a conference call with investors Jan. 23. The count fell sharply at end of last year “due to customers shutting down early before the holiday period.”
Crude for March delivery on the Nymex gained 16 cents to $96.11 a barrel at 1:45 p.m. New York time, down 3.3 percent from a year ago.
U.S. oil output slipped 0.7 percent to 6.99 million barrels a day in the seven days ended Jan. 18 after reaching the highest level since January 1993 a week earlier, according to data compiled by the Energy Information Administration, a division of the Energy Department. Stockpiles climbed 0.8 percent to 363.1 million barrels last week. They rose to a 22-year high of 387.3 million barrels in June.
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