This week, U.S. energy firms added oil and natural gas rigs for a seventh week in a row for the first time since February 2021 after crude prices this week soared to their highest since 2014.
The oil and gas rig count, an early indicator of future output, rose 10 to 645 in the week to Feb. 18, its highest since April 2020, energy services firm Baker Hughes Co. said in its closely followed report on Feb. 18.
Baker Hughes said that puts the total rig count up 248 rigs, or 62%, over this time last year.
U.S. oil rigs rose by four to 520 this week, their highest since April 2020, while gas rigs rose six, their biggest weekly gain since May 2021, to 124, their highest since December 2019.
U.S. crude futures rose close to $96 per barrel this week, their highest since September 2014.
The combined rig count has climbed for a record 18 months in a row as oil prices gained about 21% so far this year after soaring 55% in 2021.
However, analysts noted U.S. production in 2021 slipped as many energy firms focused more on returning money to investors rather than boosting output.
Oil output in the Permian in Texas and New Mexico, the biggest U.S. shale oil basin, will rise to a record 5.205 million barrels per day (MMbbl/d) in March, the Energy Information Administration said on Feb. 14.
Gas output in the major shale basins will increase to a record 91.7 billion cubic feet per day (bcf/d) in March, it projected.
But productivity in the biggest oil and gas basins has declined since hitting records of new oil well production per rig of 1,546 bbl/d in December 2020 in the Permian and new gas well production per rig of 33.3 million cubic feet per day (MMcf/d) in March 2021 in Appalachia, it said.
A growing number of energy firms said they plan to boost spending for a second year in a row in 2022 after cutting drilling and completion expenditures in 2019 and 2020.
U.S. financial services firm Cowen & Co. said the independent E&P companies it tracks plan to boost spending by about 23% in 2022 versus 2021 after increasing spending about 4% in 2021 versus 2020.
That follows a drop in capital expenditures of roughly 48% in 2020 and 12% in 2019.
Source: Reuters, Baker Huges
