U.S. energy firms this week added oil and natural gas rigs for a second week in a row as oil prices held near seven-year highs, prompting some drillers to return to the wellpad.
The oil and gas rig count, an early indicator of future output, rose six to 550 in the week to Nov. 5, 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 250 rigs, or 83%, over this time last year.
U.S. oil rigs rose six to 450 this week, their highest since April 2020, while gas rigs were unchanged at 100.
U.S. crude futures started the week near their highest since 2014 and were currently trading above $81 a barrel on Friday after OPEC+ producers rebuffed a U.S. call to pump more oil.
Despite oil prices up about 67% so far this year, some energy firms minimally raised spending to increase output in 2021, preferring to focus on boosting cash flow, reducing debt and increasing shareholder returns.
U.S. shale producers’ decision this year to resist pumping more oil even as prices surge could be nearing an end, according to company executives.
Several major oil companies, including BP Plc, Chevron Corp and Exxon Mobil Corp, are planning to increase output or shale spending next year.
U.S. financial services firm Cowen & Co said the independent exploration and production (E&P) companies it tracks plan to increase spending about 4% in 2021 versus 2020, and 11% in 2022 versus 2021 for the dozen or so firms that have already announced estimates for next year.
That follows capex reductions of roughly 48% in 2020 and 12% in 2019.
Data provider, Enverus, which publishes its own rig count data, said drillers added eight rigs in the week through Nov. 3, with most of the increase in the Permian shale in Texas and New Mexico.
Enverus said Occidental Petroleum Corp added two rigs in the Permian since mid-October and has 14 rigs running, making it the second-most active operator in the play, while top driller, Pioneer Natural Resources Co, added one in the week and has 25 rigs in the basin.