February 2, 2018 / 6:12 PM / a year ago

U.S. drillers add oil rigs for second consecutive week -Baker Hughes

    Feb 2 (Reuters) - U.S. energy companies added oil rigs for a
second week in a row as crude prices hovered near their highest
levels since 2014, prompting drillers to return to the well pad.
    Drillers added 6 oil rigs in the week to Feb. 2, bringing
the total count up to 765, the highest level since August 2017,
General Electric Co's        Baker Hughes energy services firm
said in its closely followed report on Friday. RIG-OL-USA-BHI
     The U.S. rig count, an early indicator of future output, is
much higher than a year ago when 583 rigs were active after
energy companies started to boost spending in mid-2016 as crude
were recovering from a two-year price crash.
    U.S. crude futures        traded around $65 a barrel this
week, near their highest since December 2014. That compares with
averages of $50.85 in 2017 and $43.47 in 2016.
    Looking ahead, futures were trading around $63 for the
balance of 2018           and $58 for calendar 2019          .
    In anticipation of higher prices in 2018 than 2017, U.S.
financial services firm Cowen & Co said 30 of the roughly 65
E&Ps they track, including Hess Corp        , have already
provided capital expenditure guidance indicating a 5 percent
increase in planned spending over 2017.
    Hess said it would spend $2.1 billion in 2018 mostly in
North Dakota and Guyana, keeping its capital budget unchanged
form 2017.                         
    Cowen said the E&Ps it tracks planned to spend about $66.1
billion on drilling and completions in the lower 48 U.S. states
in 2017, about 53 percent over what they planned to spend in
    Analysts at Simmons & Co, energy specialists at U.S.
investment bank Piper Jaffray, this week slightly increased
their forecast the total oil and natural gas rig count to an
average of 1,006 in 2018 and 1,131 in 2019. Two weeks ago, they
forecast 1,004 in 2018 and 1,128 in 2019.
    There were 946 oil and natural gas rigs active on Feb 2. On
average, there were 876 rigs available for service in 2017, 509
in 2016 and 978 in 2015. Most rigs produce both oil and gas.   
    The U.S. Energy Information Administration in January
projected U.S. production would rise to a record high annual
average of 10.3 million barrels per day in 2018 and 10.9 million
bpd in 2019, up from 9.3 million bpd in 2017.        
    The current all-time U.S. output annual peak was in 1970 at
9.6 million bpd, according to federal energy data.

 (Reporting by Scott DiSavino; Editing by Meredith Mazzilli)
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