U.S. energy firms this week added oil and natural gas rigs for a fifth week in a row as oil prices soared to their highest since 2014 prompting some drillers to return to the wellpad.
The combined oil and gas rig count, an early indicator of future output, rose five to 533 in the week to Oct. 8, its highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.
The total rig count was up 264 rigs, or 98%, over this time last year.
U.S. oil rigs rose five to 433 this week, also their since April 2020, while gas rigs were steady at 99 for a third week in a row.
U.S. crude futures rose to their highest since 2014 in intraday trade this week and were currently trading above $79 a barrel on Friday, buoyed by a global energy crunch that has helped natural gas prices to record highs and prompted China to demand increased coal production.
Amazingly those higher natural gas prices have not yet prompted drillers to start looking for more gas. U.S. gas prices rose to their highest since 2008 earlier this week, up over 120% so far this year, but the gas rig count was still lower than it was in July.
Oil is another story. With oil prices up about 64% so far this year, some energy firms said they plan to raise spending in 2021 after cutting drilling and completion expenditures over the past two years.
That spending increase, however, remains small.
Occidental wants to raise margins and re-establish dividend payments for its shareholders rather than focus on growing its oil production volumes, the head of one of the largest U.S. producers said on Thursday.
U.S. investment bank Piper Sandler this week forecast the rig count would rise to an average of 472 in 2021 and 599 in 2022 from 436 in 2020.
Those forecasts were up from its earlier projections the rig count would rise to an average of 466 in 2021 and 583 in 2022.
The annual average rig count peaked at 1,919 in 2012 and hit a record low of 433 in 2020, according to Baker Hughes data going back to 1988.