U.S. energy firms this week added oil and natural gas rigs for a 14th month in a row as more offshore units in the Gulf of Mexico returned to service after shutting when Hurricane Ida slammed into the coast in late August.
This week, 3 offshore rigs returned in the Gulf of Mexico, energy services firm Baker Hughes Co said in its closely followed report on Friday.
During the week ended Sept. 3, all 14 offshore oil rigs operating in the Gulf of Mexico, all of which were located off Louisiana, shut due to Ida.
The oil and gas rig count, an early indicator of future output, rose 9 to 521 in the week to Sept. 24, its highest since April 2020, Baker Hughes said.
That puts the total rig count up 260 rigs, or 100%, over this time last year.
For the month, drillers added 13 rigs, putting the count up for a 14th month in a row for the first time since July 2017, as rising oil prices have prompted drillers to return to the wellpad.
For the quarter, drillers added 51 rigs putting the count up for a fourth quarter in a row for the first time since December 2018.
U.S. oil rigs rose 10 to 421 this week, their highest since April 2020, while gas rigs fell 1 to 99, their lowest since August.
U.S. crude futures were trading around $74 a barrel on Friday, putting them near their highest since July, as global output disruptions cause bigger than expected inventory draws.
With oil prices up about 53% 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.
In fact, 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 production is expected to slide from 11.3 million barrels per day (bpd) in 2020 to 11.1 million bpd in 2021 before rising to 11.7 million bpd in 2022, according to government projections. That compares with the all-time annual high of 12.3 million bpd in 2019.