The oil and gas rig count, an early indicator of future
output, rose by 5 to 475 in the week to July 2, 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 212, or 81%, over this time last year. It was also up 95% since falling to a record low of 244 in August 2020, according to Baker Hughes data going back to 1940.
U.S. crude futures were trading around $75 a barrel this week, their highest since October 2018.
With oil prices up 55% so far this year, some energy firms said they 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.
Many analysts do not expect that extra spending to boost output at all. Instead, they think it will only replace natural declines in well production.
“U.S. oil producers continue to show capital restraint,” said Kevin Solomon, energy economics analyst at StoneX, a financial services company, noting the oil rig count was still 46% below pre-COVID levels.
Overall, U.S. oil production is expected to ease from 11.3 million barrels per day (bpd) in 2020 to 11.1 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 12.3 million bpd in 2019.