March 17, 2017 / 7:32 PM / in a year

U.S. drillers add oil rigs for 9th week in a row -Baker Hughes

    March 17 (Reuters) - U.S. drillers added oil rigs for a
ninth week in a row, extending a recovery that is expected to
boost shale production by the most in six-months in April.
    Drillers added 14 oil rigs in the week to March 17, bringing
the total count up to 631, the most since September 2015, energy
services firm Baker Hughes Inc         said on Friday.
    During the same week a year ago, there were 387 active oil
    That rig count increase came despite a collapse in crude
futures over the past two weeks to a more than three-month low
because the rigs activated this week were based on decisions
made a couple of month ago when oil prices were higher.
    U.S. crude futures        were at about $49 a barrel on
Friday, set for a modest weekly rise after falling 9 percent
last week on concerns production cuts by the Organization of the
Petroleum Exporting Countries (OPEC) was failing to reduce a
global glut as U.S. shale producers crank up activity.      
    Since crude prices first topped $50 in May after recovering
from 13-year lows in February 2016, drillers have added a total
of 315 oil rigs in 38 of the past 42 weeks, the biggest recovery
in rigs since a global oil glut crushed the market over two
years starting in mid 2014.
    Baker Hughes oil rig count plunged from a record 1,609 in
October 2014 to a six-year low of 316 in May 2016 as U.S. crude
collapsed from over $107 a barrel in June 2014 to near $26 in
February 2016.
     U.S. shale oil production in April was projected to rise
109,000 barrels per day (bpd), the biggest monthly rise in six
months, to 4.96 million bpd as output in the Permian Basin,
America's fastest growing shale oil region, hits another record
high, according government data on Monday.                 
    U.S. crude inventories edged down from record highs last
week, after nine straight weeks of builds, while overall
production was projected to rise from 8.9 million bpd in 2016 to
9.2 million bpd in 2017 and a record high of 9.6 million bpd in
2018, according to federal energy data.                    
    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 expected
to keep climbing.
    Futures for the balance of 2017           and calendar 2018
          were both trading around $50 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 818 in 2017, 937 in 2018 and
1,048 in 2019. Most wells produce both oil and gas.
    That compares with an average of 729 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 54
exploration and production (E&P) companies planned to increase
spending by an average of 50 percent in 2017 over 2016.
    That expected spending increase in 2017 followed an
estimated 48 percent decline in 2016 and a 34 percent decline in
2015, Cowen said according to the 64 E&P companies it tracks.

 (Reporting by Scott DiSavino; Editing by Marguerita Choy)
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