UPDATE 1-U.S. oil rig count steady for first this time this year -Baker Hughes
(Recasts, adds quote) By Scott DiSavino May 20 (Reuters) - U.S. energy firms this week kept the number of rigs drilling for oil unchanged for the first time this year as crude futures trade near a seven-month high, indicating that a near two-year slump in the rig count could be ending as forecast by several analysts. Drillers kept the number of rigs RIG-OL-USA-BHI at 318 in the week to May 20, holding at the lowest level since October 2009, energy services company Baker Hughes Inc said in its closely followed report on Friday. Drillers added only one rig so far this year during the week of March 18. However, the pace of cuts has slowed. So far this year, the cuts averaged 11 oil rigs per week for a total of 218. In 2015, they cut on average 18 oil rigs per week for a total of 963 for the year, the biggest annual decline since at least 1988. "We continue to believe that the U.S. rig count bottoms in the second quarter, in part due to the recent stabilization in oil prices," analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, said in a note this week. The rig count has slumped since hitting a peak of 1,609 in October 2014 during the biggest rout in crude prices in a generation. U.S. crude futures fell from over $107 a barrel mid-2014 to a near 13-year low around $26 in February. But with U.S. crude futures settling over $48 a barrel much of this week on production worries in Nigeria and Venezuela, most analysts expect the number of rigs to stop falling soon before edging up later this year with prices expected to rise in coming months. U.S. crude futures were fetching over $49 for the balance of 2016 and under $51 for calendar 2017. U.S. investment banking advisory Evercore ISI said it expects drilling to pick up in the next quarter based in part on the number of drilling permits. U.S. land permits totaled 2,099 in April, up a solid 15 percent from March, but down 33 percent year-on-year, Evercore said. Evercore expects to exit the second quarter with about 376 total rigs, before rising to an average of 401 rigs in the third quarter. (Reporting by Scott DiSavino; Editing by Marguerita Choy)
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