February 3, 2017 / 6:09 PM / a year ago

U.S. oil rig count rises to highest since October 2015 -Baker Hughes

Feb 3 (Reuters) - U.S. energy companies added oil rigs for a
13th week in the last 14, extending a nine-month recovery as
drillers take advantage of crude prices that have held mostly
over $50 a barrel since OPEC agreed to cut supplies in late
    Drillers added 17 oil rigs in the week to Feb. 3, bringing
the total count up to 583, the most since October 2015, energy
services firm Baker Hughes Inc said on Friday.
    During the same week a year ago, there were 467 active oil
    Since crude prices first topped $50 a barrel in May after
recovering from 13-year lows last February, drillers have added
a total of 267 oil rigs in 32 of the past 36 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 as U.S. crude
collapsed from over $107 a barrel in June 2014 to near $26 in
February 2016.
    U.S. crude futures were trading around $54 a barrel
on Friday and set for a seventh weekly increase in the last
eight as the Organization of the Petroleum Exporting Countries
(OPEC) and non-OPEC producers follow through on plans to reduce
production in an effort to end a global oil glut and raise
    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
projected to keep climbing.
    Futures for the balance of 2017 were trading
around $55 a barrel, while calendar 2018 was fetching
almost $56.
    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 795 in 2017, 911 in 2018 and
1,022 in 2019. Most wells produce both oil and gas.
    That compares with an average of 692 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 31
exploration and production (E&P) companies planned to increase
spending by an average of 36 percent in 2017 over 2016.
    That spending increase in 2017 followed an estimated 45
percent decline in 2016 and a 37 percent decline in 2015, Cowen
said according to the 65 E&P companies it tracks.

 (Reporting by Scott DiSavino; Editing by Meredith Mazzilli and
Chizu Nomiyama)
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