Energy Rigs Advance for Third Week, Baker Hughes Says
Oil and gas rigs in the U.S. rose to the highest level in a month as producers were expected to boost activity in the second of half of this year.
The total rig count increased by 11 to 1,770, the highest since June 14, data posted on Baker Hughes Inc. (BHI)’s website show. Oil rigs rose four to 1,395, the Houston-based field services company said on its website. Gas rigs advanced for the fourth straight week, gaining seven to 369, a three-month high.
The total U.S. count has gained three weeks in a row. Rising output from shale formations such as North Dakota’s Bakken and Texas’s Eagle Ford plays have boosted domestic oil production to the highest level since December 1990. The surge in output, driven largely by a combination of hydraulic fracturing and horizontal drilling, helped the nation meet 89 percent of its own energy needs in March.
U.S. onshore rig counts will “rise modestly” to an average of 1,720 rigs by the fourth quarter of 2013, an increase of about 30 between now and the end of the year, Peter A. Ragauss, Baker Hughes’ chief financial officer in Houston, said in a conference call with analysts today.
The company’s forecast for offshore rigs remains unchanged at an average of 52 rigs in the 2013, an increase of four deepwater rigs from a year earlier, he said.
Natural gas for August fell 2.3 cents, or 0.6 percent, to settle at $3.789 per million British thermal units on the New York Mercantile Exchange, up 26 percent from a year ago.
U.S. gas stockpiles gained 58 billion cubic feet in the week ended July 12 to 2.745 trillion, the Energy Information Administration, the Energy Department’s statistical arm, said yesterday. Supplies were 13 percent below year-earlier levels.
U.S. oil output climbed 1.2 percent to 7.49 million barrels a day last week, EIA data show. Stockpiles fell 1.9 percent to 367 million barrels.
Crude for August delivery rose 1 cent to $108.05 a barrel today on the Nymex, up 17 percent in the past year.
Drilling permits for the 30 states monitored by Barclays Plc (BARC) increased 4 percent in June, following a 2.7% rise in May, James C. West, oil services and drilling analyst for the London-based company’s investment-banking unit in New York, said in a research note July 16. The biggest advances were in Utah, Texas and Kansas, according to West.
“We believe the gradual increase in permit activity will lead to a continued rise in drilling activity, with an acceleration likely” in the second half, he said.
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