The U.S. oil and natural gas rig count this week rose for a third week in a row as high prices encourage increased spending at the wellpad, boosting demand for some oilfield services companies.
The oil and gas rig count, an early indicator of future output, rose two to 758 in the week to July 22, its highest since March 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.
U.S. oil rigs were steady at 599 this week, while gas rigs rose two to 155.
The world's largest oilfield service providers this week posted mixed second-quarter results, with Baker Hughes warning that the demand outlook for the next 12 to 18 months was “deteriorating,” while Schlumberger NV posted an upbeat outlook due to a boost in activity driven by stronger oil and gas prices.
Global crude prices hovered above $100 per barrel last quarter, fueled by tight supplies following Western sanctions on Russia, a major producer, and as energy consumption returned to near pre-pandemic levels.
Halliburton Co predicted “multiple years,” of increased activity, with spending gains in North America on track to eclipse 35%, its chief executive said, adding its hydraulic fracking equipment was sold out for the rest of the year.
Oil output in the Permian in Texas and New Mexico, the biggest U.S. shale oil basin, is due to rise to a record 5.445 million barrels per day in August, according to federal data.
U.S. financial services firm Cowen & Co said the independent exploration and production companies it tracks plan to boost spending by about 30% in 2022 versus 2021 after increasing spending about 4% in 2021 versus 2020.
That follows a drop in capital expenditures of roughly 48% in 2020 and 12% in 2019.