U.S. drillers add oil and gas rigs for third week in four -Baker Hughes (updated)

Gulfport Energy

02/07/2021 18:57

(Adds details, analysts comment)
    July 2 (Reuters) - U.S. energy firms added oil and natural
gas rigs for a third time in four weeks as oil prices rose to
their highest since 2018, prompting some drillers to return to
the wellpad.
    The oil and gas rig count, an early indicator of future 
    output, rose by 5 to 475 in the week to July 2, its highest
since April 2020, energy services firm Baker Hughes Co  BKR.N 
said in its closely followed report on Friday.  RIG-USA-BHI 
 RIG-OL-USA-BHI   RIG-GS-USA-BHI .    
    That put the total rig count up 212, or 81%, over this time
last year. It was also up 95% since falling to a record low of
244 in August 2020, according to Baker Hughes data going back to
1940.
    U.S. crude  CLc1  futures were trading around $75 a barrel
this week, their highest since October 2018.  O/R 
    With oil prices up 55% so far this year, some energy firms
said they plan to boost spending in 2021 after cutting drilling
and completion expenditures over the past two years.
    That spending increase, however, remains small as most firms
continue to focus on boosting cash flow, reducing debt and
increasing shareholder returns rather than adding output.
    Many analysts do not expect that extra spending to boost
output at all. Instead, they think it will only replace natural
declines in well production.
    "U.S. oil producers continue to show capital restraint,"
said Kevin Solomon, energy economics analyst at StoneX, a
financial services company, noting the oil rig count was still
46% below pre-COVID levels.
    Overall, U.S. oil production is expected to ease from 11.3
million barrels per day (bpd) in 2020 to 11.1 million bpd in
2021 before rising to 11.8 million bpd in 2022, according to
government projections. That compares with the all-time annual
high of 12.3 million bpd in 2019.  urn:newsml:reuters.com:*:nL2N2NQ1RS
    

 (Reporting by Scott DiSavino
Editing by Chizu Nomiyama)
 ((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters
Messaging: scott.disavino.thomsonreuters.com@reuters.net))
 
((For Refinitiv, formerly called Thomson Reuters Analytics, see: cpurl://apps.cp./cms/?pageid=usa-gas cpurl://apps.cp./cms/?pageid=usa-gas
    For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44
    U.S. natural gas inventories: http://tmsnrt.rs/2ewaRk2
    For a list of all Baker Hughes rig counts around the world, see:  RIG-NOM-BHI 
    For U.S. oil rigs, see:  RIG-OL-USA-BHI 
    For U.S. gas rigs, see:  RIG-GS-USA-BHI ))