The U.S. oil and natural rig count increased this week for the first time since March, with energy firms adding the most oil rigs in seven months, as shale producers start drilling again now that crude prices have recovered from historic lows.
The oil and gas rig count, an early indicator of future output, rose 10 from a record low to 254 in the week to Aug. 21, energy services firm Baker Hughes Co said in its closely followed report on Friday.
Prior to this week, the rig count hit records lows for 15 weeks.
U.S. oil rigs rose 11 to 183 this week, their biggest rise since the week to Jan. 17. Gas rigs fell by one to 69, just one short of its record low.
More than half the U.S. oil rigs are in the Permian basin in West Texas and eastern New Mexico where total units rose 10 to 127 this week from a record low of 117 last week, according to Baker Hughes data going back to 2011. That was the biggest weekly gain in the Permian rig count since December.
U.S. crude prices have jumped over 120% from April record lows spurred by coronavirus demand destruction, but are still down about 32% since the start of the year.
On Friday, futures were trading around $42 a barrel on hopes global economies and energy demand will snap back as governments lift lockdowns.
U.S. financial services firm Cowen & Co said the 45 independent exploration and production (E&P) companies it tracks plan to slash spending by about 47% in 2020 versus 2019. That follows a capex reduction of roughly 9% in 2019 and an increase of around 23% in 2018.
Cowen also said that some E&Ps issued early estimates for 2021 that so far point to 8% drop in spending next year versus 2020.