3 Min Read
* Gas-directed rig count climbs slightly for 2nd week * Horizontal rigs slip, still above 20-month low * Oil rig count slides from 5-month high last week NEW YORK, April 19 (Reuters) - The number of rigs drilling for natural gas in the United States edged higher for the second straight week, stirring expectations that the recent rally in gas prices might be tempting some producers to bring on more supply. The gas-directed rig count rose this week by two to 379 after posting a 14-year low of 375 two weeks ago, data from Houston-based Baker Hughes showed on Friday. Producers have mostly been curbing dry-gas drilling in favor of more profitable oil and liquids-rich plays such as Eagle Ford in Texas and Marcellus in Appalachia. But a 40 percent run-up in spot gas prices since mid-February, to a 21-month high of $4.429 per million British thermal units this week, has stirred expectations that gas output, still flowing near record highs, could increase in coming weeks. The oil-focused rig count fell by 16 to 1,371 after climbing to near a five-month high of 1,387 last week, Baker Hughes data showed. The oil count is up 34 rigs, or 2.5 percent, from the same week last year. Baker Hughes also reported that horizontal rigs, the type often used to extract oil or gas from shale, slipped by five this week to 1,097 after dipping to a 20-month low of 1,084 two weeks ago. The horizontal count is down 8 percent from the record high of 1,193 set last May. Drilling for natural gas has mostly been in decline for the last 18 months. The count is down about 60 percent since peaking in 2011 at 936, but so far production has not slowed much from the record high hit last year. The associated gas produced from more profitable shale oil and shale gas liquids wells has kept dry gas flowing at a brisk rate. The U.S. Energy Information Administration expects marketed gas production to edge up slightly in 2013 to its third straight yearly record. Gas futures prices, which were down about a penny in the $4.39 area just before the Baker Hughes data was released, showed little reaction to the report.