Oil Rigs in U.S. Rise for Third Week, Baker Hughes SaysLynn Doan and Richard Stubbe
The number of oil rigs drilling in the U.S. rose for the third consecutive week, Baker Hughes Inc. said. Natural gas rigs were little changed near the lowest level in 14 years.
Oil rigs increased by 30 to 1,387, the highest level since Nov. 23. They have jumped by 63 in the past three weeks, the biggest three-week advance in more than a year.
The oil rig count is increasing as companies switch from exploratory drilling to developmental drilling, said James Williams, president of energy consulting firm WTRG Economics in London, Arkansas. Exploratory drilling is down 17 percent from this time last year, Smith Bits, a unit of Schlumberger Ltd., said in a report today.
“You can drill more in the developmental because the sites are closer together,” Williams said. “You don’t have to move it as far and you don’t have to load it up on the truck. So it isn’t that you necessarily have more rigs employed overall, but the thing is if it’s on a truck it doesn’t count.”
Gas rigs also gained, rising by two to 377, according to data on the website of the Houston-based field-services company. Gas wells reached the lowest level since 1999 last week. The total count rose 33 to 1,771.
U.S. gas stockpiles dropped 14 billion cubic feet to 1.673 trillion in the week ended April 5, according to the Energy Information Administration, the Energy Department’s statistical arm. A deficit to year-earlier levels widened to 32.5 percent from 31.6 percent a week earlier, a record in EIA data going back to 2005.
“It’s the first time since 2008 that inventories were below the five-year average at the start of the refill season, in part, due to the recent cold weather and decreased drilling for natural gas wells,” Christian O’Neill, a Bloomberg Industries analyst in New York, said yesterday.
Natural gas for May delivery gained 9.7 cents, or 2.4 percent, this week to settle at $4.222 per million British thermal units on the New York Mercantile Exchange. Futures have more than doubled from a year ago.
U.S. oil output climbed 30,000 barrels a day last week to 7.18 million barrels a day, reaching a 20-year high, EIA data show. Stockpiles rose 250,000 barrels to 388.9 million, the highest in more than 22 years.
Crude for May delivery on the Nymex fell $1.41, or 1.5 percent, this week to settle at $91.29 a barrel, down 12 percent in the past year.