July 24, 2015 / 5:13 PM / 3 years ago

U.S. oil drillers add rigs despite crude prices collapse-Baker Hughes

July 24 (Reuters) - U.S. energy firms added 21 oil rigs this week after pulling seven rigs last week, despite a 21 percent collapse in U.S. crude prices from a recent high in June, data showed on Friday, a sign some drillers were returning to the well pad.

The gain this week, however, was only the third increase over the past 33 weeks, bringing the total rig count up to 659, the highest since late May, oil services company Baker Hughes Inc said in its closely followed report.

U.S. crude oil futures this week entered a bear market when prices fell near $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.

Analysts said both U.S. and Brent crude futures were trading at their lowest levels since March on lackluster global demand growth and lingering oversupply concerns as the Organization of the Petroleum Exporting Countries (OPEC), the United States and other producers continue pumping record or near record amounts of oil out of the ground.

The current bear market was the biggest decline for U.S. crude futures since the front-month fell nearly 60 percent from over $107 in June 2014 to under $44 in January due to those same oversupply and uninspiring demand growth worries.

In response to that near 60 percent price collapse, U.S. drillers eliminated thousands of jobs and idled 60 percent of the record high 1,609 oil rigs that were active in October.

Despite those cuts, U.S. crude production has averaged 9.6 million barrels per day for nine weeks in a row, its highest level since the early 1970s, according to government data.

Analysts however expect the rig count declines over the past six months to start to bite in the third quarter of 2015.

“The current rig count is pointing to U.S. production declining slightly sequentially between the second and third quarters of 2015,” analysts at Goldman Sachs said in a report. (Reporting by Scott DiSavino; Editing by Marguerita Choy)

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