April 4 (Bloomberg) -- The Permian Basin is back on top in the drilling world.
The oilfield in Texas and New Mexico, the largest and one of the oldest in the U.S., led an increase in rigs targeting oil and natural gas this week, adding six to 524, according to Baker Hughes Inc. The U.S. total rose by nine this week to 1,818, a 17-month high.
“This is all Permian Basin. It’s going to continue to be a hot spot,” James Williams, president of WTRG Economics in London, Arkansas, said by telephone. “You don’t have to lease new land, because you already have it. The other advantage of the Permian is it has a very well-developed infrastructure. When you drill a new well, you’re not worried about getting that stuff to market.”
Oil rigs rose by 11 to 1,498, data posted on the company’s website show, the most since Baker Hughes separated the oil and gas counts in 1987. The gas count fell to 316, the lowest level since 1993.
Hydraulic fracturing and horizontal drilling are helping producers extract record volumes from shale formations across the U.S., boosting domestic crude output to the highest in a quarter-century. The nation met 87 percent of its energy needs in 2013, the highest level since 1985, according to data from the Energy Information Administration.
Total U.S. oil output rose 2,000 barrels a day in the week ended March 28 to 8.19 million, after reaching the highest level since 1988 on March 14, according to data compiled by the Energy Information Administration, the U.S. Department’s statistical arm. Crude stockpiles fell 2.38 million barrels to 380.1 million.
Tight-oil production averaged 3.22 million barrels a day in the fourth quarter, enough to lift total U.S. output to 7.84 million barrels a day, accounting for more than 10 percent of world production, the EIA said.
West Texas Intermediate crude for May delivery rose 88 cents to $101.17 a barrel at 2:13 p.m. on the New York Mercantile Exchange, up 8.5 percent in the past year.
U.S. gas stockpiles dropped 74 billion cubic feet last week to 822 billion, the lowest since 2003, EIA data show. Supplies were 55 percent below the five-year average.
Natural gas for May delivery fell 2.6 cents to $4.444 per million British thermal units on the Nymex, up 13 percent in the past year.
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