- Gain marks fourth straight weekly rise, Baker Hughes data show
- Analyst says momentum may slow as oil prices resume slide
U.S. oil producers continue to revive drilling in the shale patch, adding rigs for the fourth consecutive week in the longest streak of increases since August.
Rigs targeting crude in the U.S. rose by 14 to 371, after 27 had already been added since the start of the month, Baker Hughes Inc. said on its website Friday. Natural gas rigs declined by 1 to 88, bringing the total for oil and gas up by 15 to 462.
"The North America market has turned," Dave Lesar, chief executive officer at Halliburton, told analysts and investors earlier this week on a conference call. "We expect to see a continued modest uptick in the U.S. rig count during the second half of the year."
Still, the increase in drilling may not have momentum, said Luke Lemoine, an analyst at Capital One Southcoast in New Orleans.
"The oil rig count popping 14 rigs this week is likely due to recent oil prices that were closer to $50," he said in an e-mail. It’s "quite possible that we continue to see a few more weeks of follow-through, but if oil prices stay in the low $40s, the rig count’s upward momentum will likely be halted."
After nearly doubling from a 12-year low in February, a rebound in oil has prompted American producers to expand drilling in recent weeks after idling more than 1,000 oil rigs since the start of last year. Prices have since started to moderate, with West Texas Intermediate on track for its second weekly decline in three weeks. The U.S. benchmark was down 2 percent to $43.85 at 1:30 p.m.
The return of idled rigs to service has led some to speculate that a rise in output will follow. U.S. production rose by 9,000 barrels a day to 8.49 million in the week ended July 15, EIA data show.