October 21, 2016 / 5:07 PM / a year ago

U.S. drillers extend rig recovery with oil over $50/bbl -Baker Hughes

Oct 21 (Reuters) - The number of rigs drilling for oil in
the United States rose again this week, extending its
second-best streak of no cuts into a 17th straight week, with
analysts expecting more additions as crude prices hold over $50
a barrel.
    Drillers added 11 oil rigs in the week to Oct. 21, bringing
the total count up to 443, the most since February, but still
below the 594 rigs seen a year ago, according to energy services
firm Baker Hughes Inc on Friday. RIG-OL-USA-BHI
    That 17-week streak of not cutting rigs matched a stretch in
2010, making it the second-longest run since 1987, following 19
weeks in 2011.
    The Baker Hughes oil rig count plunged from a record of
1,609 in October 2014 to a six-year low of 316 in May after
crude prices collapsed from over $107 a barrel in June 2014 to
near $26 in February 2016 due to a global oil glut.
    But after U.S. crude briefly climbed over $50 a barrel in
May and June, drillers have added 127 oil rigs. Analysts said
prices over $50 were high enough to prompt energy firms to
return to the well pad.
    U.S. crude futures continued to trade over $50 a
barrel for much of this week, spurred by continued talk of an
OPEC production cut and a surprisingly large drop in U.S.
inventories for the sixth week out of seven. 
    That put the front-month on track to rise for a fifth week
in a row, its longest winning streak since March, gaining about
18 percent during that time.
    With oil prices expected to continue rising in 2017 and 2018
amid a forecast tightening of the supply-demand balance,
analysts said energy firms will boost spending on drilling.
    Futures were trading above $53 a barrel for calendar 2017
 and around $55 for calendar 2018.
    Analysts at Simmons & Co, energy specialists at U.S.
investment bank Piper Jaffray, this week forecast total oil and
natural gas rigs would average 500 in 2016, 666 in 2017 and 876
in 2018.
    That compares with an average of 978 oil and gas rigs active
in 2015 and 484 so far this year, according to Baker Hughes
data.

    
 (Reporting by Scott DiSavino; Editing by Meredith Mazzilli)

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