U.S. energy firms kept the number of oil and natural gas rigs operating unchanged this week, resulting in the first monthly increase since December as higher crude prices prompt some producers to start drilling again.
In August, the oil and gas rig count rose by three to 254, according to data on Friday from energy services firm Baker Hughes Co .
The rig count fell to a record low of 244 during the week of Aug. 14.
U.S. oil rigs fell three to 180 in the week to Aug. 28, while gas rigs rose three to 72.
In the Gulf of Mexico, meanwhile, the number of offshore rigs remained unchanged at 13.
Analysts at energy data provider Enverus, which publishes its own rig count, said the weekly rig count started to decline on Aug. 24 when drillers in Arkansas, Louisiana, Texas and the Gulf of Mexico started pulling rigs in anticipation of Hurricane Laura, which made landfall on Thursday.
Even though U.S. oil prices are still down about 30% since the start of the year due to coronavirus demand destruction, U.S. crude futures have gained 128% over the past four months to around $43 a barrel on Friday on hopes global economies and energy demand will snap back as governments lift lockdowns.
Analysts said those higher oil prices have encouraged some energy firms to start adding units.
Most firms, however, still plan to keep cutting costs.
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 an 8% drop in spending next year versus 2020.