January 13, 2017 / 7:29 PM / 7 months ago

Canadian drillers add most oil rigs in two years -Baker Hughes

2 Min Read

Jan 13 (Reuters) - Energy firms in Canada more than doubled the number of rigs drilling for oil this week to the highest level in almost two years as producers returned en masse from Christmas breaks and crude prices remain near 18-month highs.

Drillers added 89 oil rigs during the week ended Jan. 13 bringing the total count up to 170, the highest level since February 2015, data from Baker Hughes Inc showed on Friday.

That was the biggest weekly increase since drillers added 129 rigs during the week of Jan. 9, 2015.

Drillers in Canada, like their counterparts in the United States, slashed the number of rigs operating during most of 2015 and 2016 as energy prices collapsed due to a global glut.

Energy firms in both the United States and Canada started adding rigs over the summer of 2016 as U.S. crude prices climbed over the key $50 a barrel level that analysts said would prompt drillers to return to the well pad.

U.S. crude futures were trading around $53 a barrel on Friday, a couple dollars below a near 18-month high of $55.24 set at the start of 2017.

Drilling in Canada is seasonal.

The Canadian rig count usually increase in January as producers start drilling again after a Christmas break before declining in the spring when the snow melts and it becomes too muddy to operate. The industry calls that snow melt the spring break up.

The rig count usually increases again in the summer when the ground dries and holds around those levels through the end of December when the count drops during the last week of the year for the Christmas break.

In 2016, the oil rig count jumped from 12 during the last week of 2015 to a high for the year of 134 in January before falling to as low as eight during the spring break up in April.

The count then climbed to 84 rigs during the summer and continued to grow to a high of 117 by mid December as rising crude prices encouraged drillers to add rigs before falling to 52 during the Christmas week of 2016. (Reporting by Scott DiSavino; Editing by Marguerita Choy)

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