Rigs targeting oil and natural gas in the U.S. advanced for the third straight week to a two-month high as drilling climbed in states including Oklahoma, Louisiana and North Dakota.
Oil rigs also gained for a third week, adding two to 1,385, data posted on Baker Hughes Inc.’s website show. The gas count increased for a second week, rising by five to 370, the Houston-based field services company said. Miscellaneous rigs, which usually drill for geothermal energy, were up one to seven, bringing the total count to 1,762.
Rigs are down from 1,809 a year ago even as domestic oil output has surged to the highest level in more than two decades, boosted by new technologies that have increased the yield from wells and shortened drilling times. Oil output per rig in North Dakota’s Bakken formation, Texas’s Eagle Ford play and the Marcellus Shale in the eastern U.S. are forecast to rise to records next month, the Energy Information Administration said in a Nov. 12 report.
Producers’ use of “new drilling and completion techniques is maximizing the resource potential of each play,” Mehdi Menouar, oil and gas services analyst for Bloomberg Industries in Skillman, New Jersey, said in a research note yesterday. “Longer horizontal lateral drilling, more frack stages and lower well spacing has helped increase oil and gas production per rig sixfold on average.”
U.S. oil output jumped 1.6 percent to 7.98 million barrels a day in the seven days ended Nov. 8, the highest level since January 1989, according to data compiled by the EIA, the Energy Department’s statistical arm. Crude stockpiles climbed 0.7 percent to 388.1 million barrels, the highest level for this season in at least 10 years.
West Texas Intermediate crude for December delivery rose 8 cents to settle at $93.84 a barrel on the New York Mercantile Exchange, up 9.8 percent in the past year.
“We might see some weakness in the oil rig count in another couple of months with lower oil prices, but it’s really not low enough to have a substantial effect for a while,” James Williams, president of WTRG Economics in London, Arkansas, said by telephone. “This week, we really didn’t see any big movements.”
Oklahoma gained the most rigs, adding four to 176. Louisiana gained three and North Dakota two.
New-well crude output per rig in the Bakken is expected to increase by 15 barrels a day to a record 496 in December, according to the EIA. Production per rig in the Eagle Ford will rise by eight barrels a day to a record 413, and the Marcellus will climb by two to 40, the agency said.
Oil output in the six most active U.S. plays, accounting for 90 percent of domestic production growth, is forecast to rise by 69,000 barrels a day to 4.02 million next month, and gas production will increase 381 million cubic feet a day to 36.5 billion, the EIA said.
U.S. gas stockpiles increased 20 billion cubic feet last week to 3.834 trillion, the EIA said yesterday. Supplies were 2 percent below year-earlier inventories.
Natural gas for December delivery gained 5.5 cents to $3.66 per million British thermal units on the Nymex, down 1.2 percent from a year ago.
Rigs on land rose by six this week to 1,685, the highest since August. Rigs in inland waters were unchanged at 17. The offshore rig count, primarily in the Gulf, increased two to 60.
Energy rigs in Canada jumped by 23 to 401.