U.S. energy firms added oil and natural gas rigs for a fifth week in a row for the first time since February as higher oil prices in recent months prompted some drillers to return to the wellpad.
The oil and gas rig count, an early indicator of future output, rose seven to 439 in the week to April 16, its highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.
That puts the rig count up 80% since falling to a record low of 244 in August 2020, according to Baker Hughes data going back to 1940. The total count, however, is still 90 rigs, or 17%, below this time last year.
U.S. oil rigs rose seven to 344 this week, while gas rigs rose one to 94, both their highest since April 2020.
U.S. crude futures were up about 6% so far this month after gaining 65% over the prior five months as oil demand recovers from being crushed by the COVID-19 pandemic about a year ago.
With prices mostly rising since October 2020, some energy firms said they plan to boost spending a bit in 2021 after cutting drilling and completion expenditures over the past two years.
That spending increase, however, remains small as most firms continue to focus on boosting cash flow, reducing debt and increasing shareholder returns rather than adding output.
Oil output from seven major shale formations was expected to rise for a third straight month, climbing by about 13,000 barrels per day (bpd) in May to 7.61 million bpd, the Energy Information Administration said on Monday.
Gas production from the basins was forecast to decline about 0.1 billion cubic feet per day (bcfd) to 82.8 bcfd in May, the EIA said. It hit a monthly record high of 86.9 bcfd in December 2019.
U.S. financial services firm Cowen & Co said the 45 independent exploration and production (E&P) companies it tracks plan to increase spending about 3% in 2021 versus 2020. That follows capex reductions of roughly 49% in 2020 and 12% in 2019.