U.S. energy firms kept the number of oil and natural gas rigs unchanged this week but added rigs for an 11th month in a row as some drillers returned to the wellpad with crude prices at their highest since 2018.
The oil and gas rig count, an early indicator of future output, were steady at 470 in the week to June 25, maintaining its April 2020 high, energy services firm Baker Hughes Co said in its closely followed report on Friday.
That put the total rig count up 205 rigs, or 77%, over this time last year. It remained up 93% since falling to a record low of 244 in August 2020, according to Baker Hughes data going back to 1940.
For the month, the total count gained 13 rigs, putting the it up for an 11th month in a row for the first time since July 2017. However, it was the smallest monthly increase since September 2020.
For the quarter, the rig count gained 53, putting it up for a third quarter in a row for the first time since December 2018. However, quarterly growth has slowed after rigs rose 66 and 90 in the first quarter 2021 and fourth quarter 2020, respectively.
U.S. oil rigs fell one to 372 this week, while gas rigs rose one to 98.
The oil rig count gained 13 in June, its 10th monthly rise and increased 48 in the second quarter, also its third consecutive quarterly rise. Growth in the number of oil rigs has also slowed, falling from 57 and 84 in the first quarter 2021 and fourth quarter 2020, respectively.
U.S. crude futures were trading around $74 a barrel this week, their highest since October 2018.
“As oil prices continue to surge upwards, rig counts are being dragged along with it,” analysts at Gelber & Associates in Houston said, noting much of the increase has been driven by oil rather than gas rigs.
With oil prices up about 53% so far this year, some energy firms plan to increase spending in 2021 after cutting drilling and completion expenditures over the past two years, although most were focusing on capital discipline and investor returns, rather than expanding supply.
However, oil and gas producers are spending more money on projects and expect to raise that amount again next year, according to executives polled by the Federal Reserve Bank of Dallas in an optimistic outlook driven by upticks in activity and a jump in oil prices.