Oil Rigs in U.S. Gain to Six-Week High as Prices Rebound
Oil rigs in the U.S. advanced to the highest level since December as energy producers, responding to a $10-a-barrel rise in crude prices over the last three months, picked up drilling activity in shale plays.
The oil rig count rose by 17 to 1,332, the biggest weekly gain since June, data posted on Baker Hughes Inc. (BHI)’s website show. Gas rigs dropped by six to 428, a seven-week low, the field-services company based in Houston said. Total energy rigs rose a second week, adding 11 to 1,764.
Oil futures have risen 12 percent since Nov. 1, luring some companies back into shale plays, said James Williams, president of WTRG Economics in London, Arkansas. Last week’s oil rig count of 1,315 was the lowest since March.
“It looks like the oil count has probably found its bottom,” Williams said by telephone. “Rigs are starting to reflect stronger oil prices, and we’re getting a little bit of movement. The Eagle Ford, Permian, North Dakota and Oklahoma were the hot spots for oil rigs this week.”
Crude for March delivery rose 28 cents to settle at $97.77 on the New York Mercantile Exchange, capping the eighth consecutive weekly gain.
U.S. oil output climbed 4,000 barrels a day to 6.99 million last week, according to the Energy Information Administration, a division of the Energy Department. Production rose to the highest level since 1993 on Jan. 11. Stockpiles increased 1.6 percent to 369.1 million barrels last week.
Chevron Corp. (CVX) is “ramping up rig activity” in the Marcellus formation on the U.S. East Coast and the Permian in West Texas and New Mexico, John S. Watson, the company’s chief executive officer, said today.
Rig activity in the Utica formation, which reaches from Tennessee to New York, is also accelerating and will attract greater interest from producers this year and next, Biliana Pehlivanova, an analyst for Barclays Plc (BARC)’s investment-banking unit in New York, said in a research note today.
Rigs in the Utica play, mostly targeted at natural gas and gas liquids, “have trended confidently higher, and well permits jumped to 381 in 2012, from 86 in 2011,” she said.
Natural gas for March delivery fell 3.8 cents, or 1.1 percent, to settle at $3.301 per million British thermal units in New York. Futures are up 73 percent from the 52-week low set in April.
Texas gained the most rigs this week, adding seven to 826. Louisiana lost the most, falling by three to 106.
Vertical rigs were unchanged at 445. Horizontal rigs climbed by nine to 1,136, the most since September.
Canadian energy rigs rose for the fifth week, increasing by four to 625, the highest level since March.
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