Drillers added four oil rigs in the week to Oct. 19, bringing the total count to 873, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.
The U.S. rig count, an early indicator of future output, is higher than a year ago when 736 rigs were active because energy companies have ramped up production to capture prices that are higher in 2018 than 2017.
Due to transport constraints to remove oil from the Permian Basin, the largest oilfield in the United States, new drilling had stalled since June but has begun to edge up as a new pipeline is due to start up and help the bottleneck.
On Friday, U.S. crude futures were trading around $69.36 per barrel, on track to fall for a second week in a row on rising U.S. inventories and concern that trade wars were curbing economic activity.
So far this year, U.S. oil futures have averaged $67.24 per barrel. That compares with averages of $50.85 in calendar 2017 and $43.47 in 2016.
Looking ahead, crude futures were trading around $69.42 per barrel for the balance of 2018 and at $69.25 for calendar 2019 .
U.S. financial services firm Cowen & Co this week said the exploration and production (E&P) companies it tracks have provided guidance indicating an 18 percent increase this year in planned capital spending.
Cowen said the E&Ps it tracks expect to spend a total of $85.3 billion in 2018. That compares with projected spending of $72.2 billion in 2017.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast the average combined oil and natural gas rig count would rise from 876 in 2017 to 1,031 in 2018, 1,092 in 2019 and 1,227 in 2020.
Since 1,067 oil and gas rigs were already in service, drillers would not have to add any rigs for the rest of the year to hit Simmons’ forecast for 2018.
Year-to-date, the total number of oil and gas rigs active in the United States has averaged 1,022. That keeps the total count for 2018 on track to be the highest since 2014, which averaged 1,862 rigs. Most rigs produce both oil and gas.
U.S. crude oil output in 2018 is expected to rise 1.39 million barrels per day to 10.74 million bpd, according to the U.S. Energy Information Administration said in its Short Term Energy Outlook (STEO).