U.S. energy firms added oil rigs for a record 23rd week in a row, extending a year-long drilling recovery as producers boost spending on expectations crude prices will rise in future months despite this week's decline to a 10-month low.
Drillers added 11 oil rigs in the week to June 23, bringing the total count up to 758, the most since April 2015, energy services firm Baker Hughes Inc said in its closely followed report on Friday.
That is more than double the same week a year ago when there were only 330 active oil rigs. Drillers have added rigs in 52 of the past 56 weeks since the start of June 2016.
U.S. crude futures were trading around $43 per barrel on a lift from a falling dollar but remained down for a fifth week in a row and close to a 10-month low as OPEC-led production cuts have failed to reduce a global crude glut.
After agreeing in December to cut production by around 1.8 million barrels per day (bpd) from January-June, OPEC and other producers in late May agreed to extend those cuts for another nine months through the end of March 2018.
Analysts said those OPEC-led cuts were being frustrated by rising output from U.S. shale drillers and other producers hoping to capture higher oil prices in future months.
Futures for the balance of 2017 were trading just over $43 a barrel, while calendar 2018 was fetching about $45 a barrel.
Analysts said crude prices are likely to remain under pressure until there are signs the number of rigs drilling for oil in the United States is stabilizing or declining.
U.S. producers are expected to increase output to 9.3 million bpd in 2017 and a record 10.0 million bpd in 2018 from 8.9 million bpd in 2016, according to federal projections.
The break even price for drilling new wells in the United States varies considerably among shale formations and even between different parts of the same play, but most analysts say producers need U.S. crude prices of $45-$50.
However, consultancy Rystad Energy, which specializes in exploration and production, said wellhead break-evens average around $38 per barrel for the Bakken shale wells completed in 2016-2017. (Reporting by Scott DiSavino; Editing by Marguerita Choy)