November 17, 2017 / 6:12 PM / 2 years ago

U.S. oil drilling rig count holds steady this week -Baker Hughes

    Nov 17 (Reuters) - U.S. energy companies kept the oil rig
count unchanged this week, General Electric Co's        Baker
Hughes energy services firm said on Friday, as some analysts
expect a gradual decline in overall rigs in the fourth quarter
and in 2018.
    The rig count RIG-OL-USA-BHI, an early indicator of future
output, held at 738 in the week to Nov. 17, still much higher
than 471 rigs a year ago as energy companies boosted spending
plans for 2017 as crude started recovering from a two-year price
    The increase in drilling lasted 14 months before stalling in
August, September and October after some producers started
trimming their 2017 spending plans when prices turned softer
over the summer.
    So far in 2017, U.S. crude futures        have averaged
almost $50 a barrel, easily topping last year's $43.47 average.
This week, futures        were trading around $56 a barrel after
rising close to $58 last week, their highest since July 2015.
    Looking ahead, futures were trading near $56 for the balance
of the year           and calendar 2018          .
    In anticipation of higher prices this year and next than in
2016, exploration and production (E&P) companies increased their
spending on U.S. drilling and completions in 2017 by about 53
percent over 2016, according to U.S. financial services firm
Cowen & Co.
    Cowen said 14 of the 64 E&Ps they track have already
provided capital expenditure guidance for 2018 indicating a 9
percent increase in planned spending over 2017.
    Cowen, which has its own U.S. rig count, said it expects a
gradual decline in rigs in the fourth quarter of 2017 and in
    There were 915 oil and natural gas rigs active on Nov. 17.
The average number of rigs in service so far in 2017 was 870.
That compares with 509 in 2016 and 978 in 2015. Most rigs
produce both oil and gas.
    The total rig count so far in the fourth quarter averaged
915, down from an average of 942 in the third quarter.
    The United States, whose upstream energy industry has seen a
resurgence with the development of fracking technology, would
become the "undisputed leader of oil and gas production
worldwide," the International Energy Agency's (IEA) head Fatih
Birol said on Thursday.             
    The U.S. is expected to account for more than 80 percent of
global oil production growth in the next 10 years and it will
produce 30 percent more gas than Russia by that time, the
Paris-based energy watchdog said.
    The U.S. Energy Information Administration this week
projected U.S. shale production would rise for a 12th
consecutive month in December to 6.2 million barrels per day.
    Overall, U.S. production was expected to rise to 9.2 million
bpd in 2017 and a record 10.0 million bpd in 2018 from 8.9
million bpd in 2016, the EIA said. Output peaked at 9.6 million
bpd in 1970.        

 (Reporting by Scott DiSavino; Editing by Marguerita Choy)
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