UPDATE 1-U.S. oil drillers add rigs despite crude price collapse-Baker Hughes

Fri Jul 24, 2015 1:58pm EDT
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(Adds rig additions per basin and drillers returning to the well pad)

By Scott DiSavino

July 24 (Reuters) - U.S. oil producers added 21 oil rigs in the past week, the most in over a year, data showed on Friday, suggesting that drillers were moving more aggressively than expected, just before crude prices' latest dive down.

Oil producers, who cut rigs in the face of falling prices late last year, began to add rigs back in the week ending July 2, oil services company Baker Hughes Inc said in its closely followed report.

The latest addition comes amid a 21 percent collapse in U.S. crude prices from a recent high in June, data showed on Friday.

The rise in the rig count this week was the biggest increase since April 2014. It was, however, only the third addition over the past 33 weeks, bringing the total rig count up to 659, the highest since late May.

Drillers added oil rigs in all four of the major U.S. shale oil basins with three in the Permian in West Texas and eastern New Mexico, two in the Eagle Ford in South Texas, and one each in the Niobrara in Colorado and Wyoming and the Bakken in North Dakota and Montana.

The rig increase shows that energy firms have followed up on their plans to drill more when U.S. crude prices were averaging $60 a barrel in May and June.

U.S. crude oil futures this week, however, entered a bear market with prices down to about $48 a barrel from a recent high over $61 in late June. A 20 percent downturn is considered by many traders to constitute a bear market.   Continued...