U.S. energy firms added oil and natural gas rigs this week, leading to a ninth straight monthly rig count increase, as a recovery in prices lured some drillers back to the wellpad.
The oil and gas rig count, an early indicator of future output, rose two to 440 in the week to April 30, its highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.
That was the sixth time the count increased in the past seven weeks and put the total number up 32, or 8%, over this time last year. It was also up 80% since falling to a record low of 244 in August 2020, according to Baker Hughes data going back to 1940.
This week was the first time the current rig count rose over the year ago since April 2019 due in part to the massive 263 rig drop in the number of units operating in April 2020 when energy demand destruction from the coronavirus caused oil futures to turn negative.
For the month, the total count rose 23 rigs, increasing for the ninth month in a row for the first time since July 2017. Oil rigs rose for an eighth straight month, to their highest since April 2020.
U.S. oil rigs fell one to 342 this week, while gas rigs rose two to 96, their highest since April 2020.
U.S. crude futures were trading around $64 a barrel on Friday, putting the contract on track to rise for the fifth time in the past six months.
With prices mostly rising since November 2020, some energy firms plan to boost spending 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.
Exxon Mobil Corp’s capital spending fell to $3.1 billion in the first quarter, the lowest in nearly two decades. The top U.S. oil producer covered its spending and dividend with cash flow for the first time since the third quarter of 2018.
Chevron Corp said capital spending for the first quarter was $2.5 billion, down from $4.4 billion in the same period last year.
The second-largest U.S. oil producer will restrain spending this year, including in shale. “The stock markets are not sending a signal to us or our sector to increase capital,” CFO Pierre Breber said.
Crude oil output in the U.S. fell dropped by over a million barrels per day (bpd) in February, falling to 9.862 million bpd, its lowest levels since October 2017, according to a monthly government report.
February’s data is the first time oil production has dropped below 10 million bpd since January 2018, according to the agency. The output drop came as a freeze in Texas shut in some production, but declines were also seen in other major oil-producing states.
Monthly gross natural gas production in the U.S. Lower 48 states fell by 7.8 billion cubic feet per day (bcfd), the biggest monthly decline on record, to 94.8 bcfd in February, the government said.