U.S. energy firms this week added oil and natural gas rigs for a ninth week in a row amid higher energy prices over the past few months.
The oil and gas rig count, an early indicator of future output, rose five to 378 in the week to Jan. 22, its highest since May, energy services firm Baker Hughes Co said in its closely followed report on Friday.
Despite gains in recent months, that count is still 416 rigs, or 52%, below this time last year. The total count, however, has soared since hitting a record low of 244 in August, according to Baker Hughes data going back to 1940.
U.S. oil rigs rose two to 289 this week, their highest since May, while gas rigs rose three to 88, their highest since April, according to Baker Hughes data.
U.S. crude futures were trading around $52 per barrel on Friday. That is just shy of the near $54 high hit last week, which was the contract’s highest since February 2020.
Looking forward, however, U.S. crude futures were trading lower at around $51 a barrel for the balance of 2021 and $49 for calendar 2022, which could prompt producers to reduce activity in the future.
Simmons Energy, energy specialists at U.S. investment bank Piper Sandler, forecast the U.S. rig count would fall from an annual average of 433 in 2020 to 369 in 2021 before rising to 567 in 2022.
That is the same as Simmons forecast since mid December.29dk2902l