Rigs Targeting Gas in U.S. Gain on Rise in Texas DrillingLynn Doan and Richard Stubbe
Rigs targeting natural gas in the U.S. jumped this week as producers of the heating fuel increased drilling in parts of Texas.
Gas rigs surged by nine to 338, erasing a drop from a week earlier, according to Baker Hughes Inc. Those drilling for the fuel in Texas rose by five to 89, the highest since June. The U.S. oil count meanwhile fell by nine to 1,592, data posted on the company’s website show.
The rebound in gas rigs threatens to come at the expense of oil drilling. U.S. crude has dropped by more than $10 a barrel over the past three months. The gas rig count has added 24 rigs since June after sliding for three straight quarters.
“It’s not surprising to see a few more gas rigs because prices are better than they were a year ago,” James Williams, president of WTRG Economics in London, Arkansas, said by telephone. “We may be at the point where this drop in crude prices has an impact on oil drilling.”
Natural gas for October delivery climbed 1.4 cents, or 0.4 percent, to $3.985 per million British thermal units at 1:46 p.m. East Coast time today on the New York Mercantile Exchange, up 14 percent in the past year.
U.S. gas stockpiles rose 97 billion cubic feet last week to 2.988 trillion, according to the EIA. Supplies were 12.5 percent below the five-year average and 11.4 percent below year-earlier levels.
West Texas Intermediate crude for November delivery rose $1.08, or 1.2 percent, to $93.61 a barrel on the Nymex. Prices are down 9.1 percent from a year ago.
Oil production climbed 29,000 barrels a day in the week ended Sept. 19 to 8.87 million, the highest level since 1986, Energy Information Administration data show. Oil supplies dropped 4.27 million barrels to 358 million.
The total U.S. rig count was unchanged at 1,931. It has almost doubled from five years ago as producers use horizontal drilling and hydraulic fracturing to reach oil and gas deposits in U.S. shale formations.