The rig count has slowed as several U.S. exploration and production (E&P) companies reduced capital spending plans.
Drillers added two oil rigs in the week to July 28, bringing the total count up to 766, the most since April 2015, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.
That compares with 374 active oil rigs during the same week a year ago. Drillers have added rigs in 55 of the past 61 weeks since the start of June 2016.
The rig count is an early indicator of future output.
Several E&Ps, including ConocoPhillips , Hess Corp , Anadarko Petroleum Corp , said this week they reduced their capital spending plans in reaction to crude price declines over the past four months.
Those companies had mapped out ambitious spending programs for 2017 when they expected oil prices to be higher than where they are currently, which on Friday was just under $50 per barrel.
Halliburton Co , the third biggest oilfield services company in the world, this week warned “customers were tapping the breaks,” causing the North American rig count to show “signs of plateauing.”
Despite this week’s announced spending cuts, the E&P still planned to spend more than last year.
Analysts at U.S. financial services firm Cowmen & Co said in a note this week that its capital expenditure tracking showed 60 E&Ps planned to increase spending by an average of 51 percent in 2017 from 2016.
That expected spending increase in 2017 followed an estimated 48 percent decline in 2016 and a 34 percent decline in 2015, Cowen said, according to the 64 E&Ps it tracks.
Cowen said it expects the total U.S. count, including both oil and natural gas rigs, to decline through 2017 and 2018. Most wells produce both oil and gas.
The current U.S. oil and gas rig count is 958, according to Baker Hughes. That compares with an average of 509 in 2016 and 978 in 2015.
U.S. producers are projected to boost output to 9.3 million barrels per day (bpd) in 2017 and a record 9.9 million bpd in 2018 from 8.9 million bpd in 2016, according to federal data.
(Reporting by Scott DiSavino; Editing by David Gregorio)