August 2, 2013 / 5:38 PM / 4 years ago

UPDATE 1-U.S. natgas rig count climbs 19 to 388 -Baker Hughes

* Gas-directed rig count up for 5th time in 6 weeks
    * Horizontal rigs gain for second straight week
    * Oil rig count slips 13 to 1,388

    NEW YORK, Aug 2 (Reuters) - The number of rigs drilling for
natural gas in the United States jumped by 19 this week to 388,
data from Houston-based Baker Hughes showed on Friday.
    The gas-directed rig count, which posted an 18-year low of
349 six weeks ago, has climbed in five of the past six weeks.
    Recent rig gains have stirred concerns that new investment
in gas pipelines and processing plants, particularly in the
East, were allowing producers to pump even more supply into an
already oversupplied market.
    Gas futures prices on Friday, which were down about 2.5 
cents at $3.362 per mmBtu just before the data was released,
slipped about a penny after the report.
    The oil-focused rig count fell by 13 this week to 1,388. The
oil rig count hit a nine-month high of 1,413 seven weeks ago,
Baker Hughes data showed. The oil count is down 41 rigs, or
nearly 3 percent, from the same week last year.
    Baker Hughes reported horizontal rigs, the type often used
to extract oil or gas from shale, climbed for a second straight
week, adding six this week to 1,067. The horizontal count is
down 10 percent from the record high of 1,193 set in May 2012.
    Drilling for natural gas has mostly been in decline for the
last 21 months. The count is still down nearly 59 percent since
peaking in October 2011 at 936, but so far production has not
slowed much, if at all, 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 still expects
gas output in 2013 to post a record high for a third year.

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