January 27, 2017 / 6:06 PM / in 9 months

U.S. drillers add oil rigs for 12th week in 13 -Baker Hughes

Jan 27 (Reuters) - U.S. energy companies this week added oil
rigs for a 12th week in the last 13, extending an eight-month
recovery as drillers take advantage of a deal by OPEC to cut
production that has kept crude prices over $50 a barrel since
early December.
    Drillers added 15 oil rigs in the week to Jan. 27, bringing
the total count to 566, the most since November 2015, energy
services firm Baker Hughes Inc said on Friday.
RIG-OL-USA-BHI
    During the same week a year ago, there were 498 active oil
rigs.
    Since crude prices first topped $50 a barrel in May after
recovering from 13-year lows in February, drillers have added a
total of 250 oil rigs in 31 of the past 35 weeks, the biggest
recovery in rigs since a global oil glut crushed the market over
two years starting in mid-2014.
    The Baker Hughes oil rig count plunged from a record 1,609
in October 2014 to a six-year low of 316 in May. U.S. crude
collapsed from over $107 a barrel in June 2014 to near $26 in
February 2016.
    U.S. crude futures were trading around $53 a barrel
on Friday and set for a sixth increase in the last seven
sessions on signs the Organization of the Petroleum Exporting
Countries (OPEC) and non-OPEC producers were mostly adhering to
planned output cuts announced in November and December. 
    Analysts said they expect U.S. energy firms to boost
spending on drilling and pump more oil and natural gas from
shale fields in coming years now that energy prices are
projected to keep climbing.
    Futures for the balance of 2017 were trading
around $54 a barrel, while calendar 2018 was fetching
almost $55.
    Analysts at Simmons & Co, energy specialists at U.S.
investment bank Piper Jaffray, this week forecast the total oil
and gas rig count would average 783 in 2017, 898 in 2018 and
1,009 in 2019. Most wells produce both oil and gas.
    That compares with an average of 683 so far in 2017, 509 in
2016 and 978 in 2015, according to Baker Hughes data.
    Analysts at U.S. financial services firm Cowen & Co said in
a note this week that its capital expenditure tracking showed 30
exploration and production (E&P) companies planned to increase
spending by an average of 35 percent in 2017 over 2016.
    That spending increase in 2017 followed an estimated 48
percent decline in 2016 and a 34 percent decline in 2015, Cowen
said, according to the 65 E&P companies it tracks.
    U.S. production was expected to rise from 8.9 million
barrels a day in December 2016 to around 9.0 million bpd in
April, 9.1 million in October and 9.2 million in November, the
U.S. Energy Information Administration said. 

    
 (Reporting by Scott DiSavino; Editing by Marguerita Choy)

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