Rigs targeting oil and natural gas in the U.S. increased by 12 this week to 1,775, a three-month high, according to Baker Hughes Inc.
Oil rigs rose for the sixth week in a row, by six to 1,397, data posted on the company’s website show. The gas count rose by eight to 375, the Houston-based field services company said. Miscellaneous rigs fell by two to three.
U.S. oil output has shot up to the highest level in two decades as producers use hydraulic fracturing and horizontal drilling to tap into long-unreachable shale deposits. Companies are also leveraging more efficient drilling techniques such as horizontal and directional rigs, which can bore in multiple directions from the same pad to cut the time it takes to bore wells and boost yield.
“The adoption of horizontal rigs may spur demand for drilling and oilfield services,” Bloomberg Industries analyst Mehdi Menouar wrote in a 2014 outlook note yesterday. Horizontal rigs require three to five times as much oilfield service as traditional vertical rigs, he said.
The horizontal rig count rose by 10 to 1,137 this week, while vertical rigs rose by one to 415, Baker Hughes said. The directional rig count also rose by one, to 223. Horizontal and directional rigs accounted for 76.6 percent of the count, near the record high of 77.5 percent set Oct. 25.
U.S. oil output fell to 8.01 million barrels a day last week, down 0.1 percent from the highest level since 1989 the week before, the Energy Information Administration, the Energy Department’s statistical arm, said on Dec. 4. Crude stockpiles declined 5.59 million barrels to 385.8 million.
West Texas Intermediate crude for January delivery traded at $97.57 a barrel at 1:18 p.m. on the New York Mercantile Exchange, up 13 percent in the past year.
U.S. gas stockpiles declined 162 billion cubic feet last week to 3.614 trillion, the EIA said. Supplies were 2.8 percent below the five-year average. Natural gas for January delivery traded at $4.132 per million British thermal units on the Nymex, up 13 percent from a year ago.