March 2, 2018 / 6:14 PM / 5 months ago

U.S. drillers add oil rigs for 6th consecutive week -Baker Hughes

    March 2 (Reuters) - U.S. energy companies added oil rigs for
a sixth week in a row as crude prices hovered near three-year
highs, prompting more drillers to boost their spending plans for
2018.
    Drillers added 1 oil rig in the week to March 2, bringing
the total count to 800, the highest level since April 2015,
General Electric Co's        Baker Hughes energy services firm
said in its closely followed report on Friday. RIG-OL-USA-BHI
    That was the first time since June that drillers added rigs
for six consecutive weeks. They added rigs for 23 weeks in a row
between January and June 2017.
    The U.S. rig count, an early indicator of future output, is
much higher than a year ago when 609 rigs were active as energy
companies have continued to boost spending since mid-2016 when
crude prices began recovering from a two-year crash.
    U.S. crude futures        traded around $61 a barrel this
week, close to levels hit in late January when prices rose to
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 $60 for the
balance of 2018           and $56 for calendar 2019          .
    In anticipation of higher prices in 2018 than 2017, U.S.
financial services firm Cowen & Co said 58 of the roughly 65
exploration and production (E&P) companies they track, including
EOG Resources Inc        , have already provided capital
expenditure guidance indicating an 11 percent increase in
planned spending over 2017.
    EOG boosted its 2018 capital expenditure budget to $5.4-5.8
billion, up from $3.7-$4.1 billion in 2017.
                      
    Cowen said those E&Ps that have reported spending plans for
2018 planned to spend a total of $81.4 billion in 2018, up from
an estimated $73.1 billion in 2017.
    Analysts at Simmons & Co, energy specialists at U.S.
investment bank Piper Jaffray, this week kept their forecast for
the total oil and natural gas rig count at an average of 1,015
in 2018 and 1,128 in 2019, the same as last week.
    So far this year, the total number of oil and natural gas
rigs active in the United States has averaged 955. That compares
with 876 rigs operating in 2017, 509 in 2016 and 978 in 2015.
Most rigs produce both oil and gas.
    U.S. crude oil production shattered a 47-year output record
in November and retreated slightly in December as oil production
from shale continued to upend global supply patterns, the U.S.
Energy Information Administration (EIA) said in a report this
week.             
    For the year, EIA projected in February that total U.S.
production will rise to 10.6 million bpd in 2018 and 11.2
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)
  
 
 
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