U.S. Energy Rigs Unchanged at 1,777, Baker Hughes Says

Rigs targeting oil and natural gas in the U.S. were unchanged this week at 1,777, according to Baker Hughes Inc.

Oil rigs rose by eight to 1,416, data posted on the company’s website show. The gas count fell by nine to 356, the Houston-based field services company said. Miscellaneous rigs rose by one to five.

The Permian Basin in western Texas and southeastern New Mexico, the largest and one of the oldest oil fields in the U.S., saw the biggest gain in rigs, adding six to 484. There are 20 more rigs there than at this time last year.

“The Permian is the center of activity,” said Jim Williams, president of London, Arkansas-based WTRG Economics. “You have great infrastructure there. If you need something to drill for oil, you can pick up the phone to find it, and a local guy will have it.”

Energy producers are using horizontal drilling and hydraulic fracturing to extract a record volume of crude from shale-oil wells in the U.S., propelling domestic output to the highest level in a quarter-century.

The U.S. onshore well count is expected to rise 5 percent this year while rigs remain flat, according to Baker Hughes. The company’s customers “are going to squeeze about the last drops out of the efficiency curve that they’re going to get, and it’s going to be about making better wells,” Martin Craighead, Baker Hughes’s chief executive officer, said in a conference call with analysts Jan. 21.

Output Slips

U.S. oil output fell 1.3 percent to 8.05 million barrels a day in the seven days ended Jan. 17 after climbing a week earlier to the highest level since 1988, the Energy Information Administration, the Energy Department’s statistical unit, said yesterday. Crude stockpiles rose 990,000 barrels to 351.2 million.

West Texas Intermediate crude for March delivery fell 56 cents, or 0.6 percent, to $96.76 a barrel at 1:55 p.m. on the New York Mercantile Exchange, up 0.8 percent in the past year.

U.S. gas stockpiles dropped 107 billion cubic feet last week to 2.423 trillion, the EIA said. Supplies were 13.2 percent below the five-year average and 19.8 percent less than last year’s stocks for the week.

Natural gas for February delivery rose 41.5 cents, or 8.8 percent, to $5.145 per million British thermal units on the Nymex, up 49 percent from a year ago.

Before it's here, it's on the Bloomberg Terminal.