August 26, 2016 / 5:11 PM / 2 years ago

U.S. oil drilling rig count steady after 8 weeks of hikes -Baker Hughes

Aug 26 (Reuters) - The number of U.S. oil drilling rigs were
unchanged this week after eight weeks of consecutive rises,
according to a closely followed report on Friday, although
traders and analysts expect the rig count to keep rising given
the recovery in crude prices.
    The rig count remained steady at 406 in the week to Aug. 26,
 compared with 675 a year ago, energy services firm Baker Hughes
Inc said. RIG-OL-USA-BHI.
    Before this week, the rig count rose by 76 since the week
ended July 1, the most in a row since April 2014, after crude
prices hit the key $50-a-barrel mark that made a return to the
well pad viable. 
    "Rigs are going to continue to climb," said John Kilduff,
partner at New York energy hedge fund Again Capital.
    "We are in a price environment where there are an increasing
number of fields that are profitable, and you have a lot of
companies that are on the edge and need to generate cash to
service their debt. Even if the wells are marginally profitable,
they are going to be put into service."
    On Friday, U.S. crude hovered near $47 a barrel,
versus its 2016 peak of $51.67 in June that spurred a return to
the well pad after prices hit a 12-year low of $26.05 in
    Crude futures have risen more than $8 a barrel, or about 20
percent, over the past three weeks on speculation that Saudi
Arabia and other key members of the Organization of the
Petroleum Exporting Countries will agree next month to a
production freeze deal with non-OPEC members led by Russia. 
    The rig count is one of several indicators of future oil and
gas production. Other indicators include drillers ability to get
more out of each well and the completion of drilled but
uncompleted wells or DUCs.   

 (Reporting by Barani Krishnan; Editing by Marguerita Choy)
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