(Reuters) – U.S. energy companies added one oil rig this week, the fifth weekly increase in a row, as oil prices hovered at two-week highs.
Drillers added one oil rig in the week to Feb. 23, bringing the total count up to 799, the highest level since April 2015, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.That was the first time since June that drillers added rigs for five consecutive weeks.
The U.S. rig count, an early indicator of future output, is much higher than a year ago when 602 rigs were active as energy companies have continued to boost spending since mid-2016 when crude prices began recovering from a two-year crash.
U.S. crude futures traded near $63 a barrel on Friday, moving close to the peaks from late January when prices rose to their highest since December 2014.
That compares with averages of $50.85 in 2017 and $43.47 in 2016.
Looking ahead, futures were trading at near $62 for the balance of 2018 and $57 for calendar 2019.
In anticipation of higher prices in 2018 than 2017, U.S. financial services firm Cowen & Co said 53 of the roughly 65 exploration and production (E&P) companies they track, including Apache Corp, have already provided capital expenditure guidance indicating a 9 percent increase in planned spending over 2017.
U.S. shale oil producer Apache this week said it would spend 70 percent of its $3 billion capital budget for this year on drilling wells in the Permian, which is at the heart of the U.S. shale boom. About $500 million of that will be spend on pipelines through Alpine High.
Cowen said the E&Ps it tracks planned to spend about $66.1 billion on drilling and completions in the lower 48 U.S. states in 2017, about 53 percent over what they planned to spend in 2016.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week kept their forecast for the total oil and natural gas rig count nearly unchanged to an average of 1,015 in 2018 and 1,128 in 2019. Last week, they forecast 1,014 in 2018 and 1,128 in 2019.
There were 978 oil and natural gas rigs active on Feb. 23. On average, there were 876 rigs available for service in 2017, 509 in 2016 and 978 in 2015. Most rigs produce both oil and gas.