U.S. energy firms added oil and natural gas rigs for a record 17 months in a row as higher prices lured some drillers back to the wellpad after last year’s coronavirus-driven decline in demand.
The oil and gas rig count, an early indicator of future output, was unchanged at 586 in the week to Dec. 31, energy services firm Baker Hughes Co said in its closely followed report on Friday.
During December, the total rig count rose by 17. For the quarter, the count was up 65, its fifth increase in a row.
For the year the count was up 235. That compares with a decrease of 454 rigs in 2020 and a decline of 278 rigs in 2019.
Even though the rig count has been rising for a record 17 months in a row, analysts noted production was still expected to ease as energy firms continue to focus more on returning money to investors than boosting output.
That puts the total rig count up 235 rigs, or 67%, over this time last year.
U.S. oil rigs were steady at 480 this week, while gas rigs were also unchanged at 106.
U.S. crude futures were trading around $75 per barrel on Friday, putting the contract on track for its best month since February.
With oil prices up about 55% this year – the best yearly performance since 2009 – some energy firms said they plan to boost spending in 2021 and 2022 after cutting drilling and completion expenditures in 2019 and 2020.
That spending increase, however, remains small and much of the money was put toward completing wells that were drilled in the past, known in the industry as DUC (drilled but uncompleted) wells.
Most firms continue to focus on boosting cash flow, reducing debt and increasing shareholder returns rather than adding output.
U.S. oil production is expected to slide from 11.3 million barrels per day (bpd) in 2020 to 11.2 million bpd in 2021 before rising to 11.9 million bpd in 2022, according to government projections. That compares with the all-time annual high of 12.3 million bpd in 2019.