U.S. energy firms this week added oil and natural gas rigs for a tenth week in a row, with the rig count up in January for a sixth straight month, as monthly oil production rebounds amid rising prices.
The oil and gas rig count, an early indicator of future output, rose six to 384 in the week to Jan. 29, its highest since May, energy services firm Baker Hughes Co said in its closely followed report on Friday.
The 10-weeks of gain is the longest streak of increases since June 2018.
Despite gains in recent months, that count is still 406 rigs, or 51%, below this time last year. The total count, however, has soared since hitting a record low of 244 in August, according to Baker Hughes data going back to 1940.
The rig count was up for a sixth month in a row, gaining 33 in January, the biggest rise since October.
U.S. oil rigs rose six to 295 this week, their highest since May, while gas rigs were unchanged.
In January, the oil rig count rose 28 in its fifth monthly increase.
U.S. crude oil production rose 692,000 barrels per day (bpd) in November to 11.1 million bpd, its highest since April, according to the latest government monthly data on Friday.
Oil output dropped from a monthly record high of 12.9 million bpd in November 2019 to just 10.0 million bpd in May 2020 as coronavirus depressed demand and prices forced widespread drilling cuts.
U.S. crude futures were trading around $52 per barrel on Friday. That is just shy of the near $54 high hit earlier in the month, which was the contract’s highest since February 2020.
Looking forward, however, crude futures were trading lower at around $51 a barrel for the balance of 2021 and $49 for calendar 2022, which could prompt some producers to reduce activity in the future.
Simmons Energy, energy specialists at U.S. investment bank Piper Sandler, forecast the rig count would fall from an annual average of 433 in 2020 to 407 in 2021 before rising to 552 in 2022.
That compares with Simmons prior forecast for an average of 369 in 2021 and 567 in 2022. 29dk2902l