June 16, 2017 / 5:14 PM / a year ago

U.S. drillers add oil rigs in record streak but pace stays slow -Baker Hughes

    June 16 (Reuters) - U.S. energy firms added oil rigs for a
record 22nd week in a row in a year-long drilling recovery but
the pace of those additions has slowed in recent months as crude
prices dropped to 2017 lows  despite OPEC-led efforts to end a
global supply glut.
    Drillers added six oil rigs in the week to June 16, bringing
the total count up to 747, the most since April 2015, energy
services firm Baker Hughes Inc         said on Friday.
    That compares with 337 rigs in the same week a year ago.
    The pace of those additions, however, has slowed over the
past two months with the decline in crude prices.
    U.S. crude futures        were trading near a seven-month
low at around $44.70 a barrel on Friday, putting the front-month
on track to decline for a fourth consecutive week, on widespread
evidence of a fuel glut despite efforts led by the Organization
of the Petroleum Exporting Countries (OPEC) to tighten the
    After agreeing in December to cut production by around 1.8
million barrels per day (bpd) from January to June, OPEC and
other producers on May 25 agreed to extend those cuts to the end
of the first quarter.             
    Growth in oil supply next year is expected to outpace an
anticipated pick-up in demand that will push global consumption
above 100 million bpd for the first time, the International
Energy Agency said this week.             
    The failure of those OPEC-led cuts to tighten the market and
keep prices higher, however, has led shale drillers to reduce
their hedges, leaving them vulnerable to falling oil prices.
    At the same time, prominent hedge funds said they have
reduced the size of their positions in shale firms in the
Permian, the largest oilfield in the United States.
    U.S. shale oil production is expected to rise for a seventh
consecutive month in July, according to a forecast this week
from the U.S. Energy Information Administration.             
    Daily oil output in North Dakota, meanwhile, rose 2 percent
in April.             
    Futures for the balance of 2017           were trading
around $45 a barrel, while calendar 2018           was fetching
about $47 a barrel.
    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 883 in 2017, 1,101 in 2018 and
1,212 in 2019. Most wells produce both oil and gas.
    That compares with an average of 809 so far in 2017, 509 in
2016 and 978 in 2015. If correct, Simmons' 2019 forecast would
be the most since 2014 when there were 1,862 active rigs. The
rig count peaked in 2012 at 1,919, according to Baker Hughes.

 (Reporting by Scott DiSavino; Editing by Marguerita Choy)
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