U.S. energy firms added oil and natural gas rigs for a third week in a row as higher crude prices prompt some drillers to return to the wellpad.
The oil and gas rig count, an early indicator of future output, rose five to 453 in the week to May 14, its highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.
That put the total rig count up 114 rigs, or 34%, over this time last year. It was also up 86% since falling to a record low of 244 in August 2020, according to Baker Hughes data going back to 1940.
U.S. oil rigs rose eight to 352 this week, their highest since April 2020, while gas rigs fell three to 100 in their biggest weekly decline since July 2020.
U.S. crude futures were trading around $65 a barrel on Friday, putting the contract up about 34% so far this year after it fell about 21% last year.
With prices mostly rising since October, some energy firms have said they plan to boost spending in 2021 after cutting drilling and completion expenditures over the past two years.
“We are on track for a rig count of 600 by the end of the year. The pace is moderated by companies focusing on positive cash flow, the need to refurbish stacked rigs and completion equipment and the slow return of experienced personnel,” said James Williams at WTRG Economics in Arkansas.
Overall, U.S. oil production is expected to ease from 11.3 million barrels per day (bpd) in 2020 to 11.0 million bpd in 2021 before rising to 11.8 million bpd in 2022, according to government projections. That compares with the all-time annual high of 12.2 million bpd in 2019.