November 11, 2016 / 6:12 PM / in a year

U.S. drillers add oil rigs for 21st week in 24 -Baker Hughes

Nov 11 (Reuters) - U.S. oil drillers increased rigs this
week for a 21th week in the last 24, as energy firms follow
through on plans to add rigs made months ago when crude was
still trading over the key $50 a barrel level analysts said
should lead to more drilling.
    Drillers added two oil rigs in the week to Nov. 11, bringing
the total count up to 452, the most since February, but still
below the 574 rigs seen a year ago, energy services firm Baker
Hughes Inc said on Friday. RIG-OL-USA-BHI
    Since crude topped $50 a barrel in May, June and October,
drillers have added 136 oil rigs, its biggest recovery in over
two years since prices collapsed due to a global oil glut.
    The Baker Hughes oil rig count plunged from a record 1,609
in October 2014 to a six-year low of 316 in May as U.S. crude
collapsed from over $107 a barrel in June 2014 to near $26 in
February 2016.
    U.S. crude futures were trading above $43 a barrel on
Friday, on track to fall for a third week in a row after OPEC
said its output in October reached a record high, casting doubt
on whether its plans to limit production would ease persistent
oversupply in the market. 
    But with oil prices still expected to rise in 2017 and 2018
with a projected tightening of the supply-demand balance,
analysts continued to expect energy firms to follow through on
previously announced plans to boost spending on new drilling in
coming years.
    Futures were trading near $47 a barrel for calendar 2017
 and near $50 for calendar 2018.
    Analysts at U.S. financial services firm Cowen & Co said
this week in a note that its capital expenditure tracking showed
17 exploration and production (E&P) companies, including
ConocoPhillips and Concho Resources Inc, planned
to increase spending by an average of 33 percent in 2017 over
2016.  
    Cowen said that forecast 2017 increase followed an estimated
48 percent decline in 2016 and a 35 percent decline in 2015 for
the 65 E&P companies it tracks.
    Analysts at Simmons & Co, energy specialists at U.S.
investment bank Piper Jaffray, this week forecast the total oil
and natural gas rig count would average 504 in 2016, 685 in 2017
and 896 in 2018. Most wells produce both oil and gas.
    That compares with an average of 978 oil and gas rigs active
in 2015, according to Baker Hughes data.

    
 (Reporting by Scott DiSavino; Editing by Marguerita Choy)

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