U.S. Drillers Add Oil Rigs For First Week Since June

U.S. energy firms this week increased the number of oil rigs operating for the first time in seven weeks despite plans by most producers to cut spending on new drilling this year.

Companies added six oil rigs in the week to Aug. 16, the biggest increase since April, bringing the total count to 770, General Electric Co’s  Baker Hughes energy services firm said in its closely followed report on Friday. 

In the same week a year ago, there were 869 active rigs.

The oil rig count, an early indicator of future output, has declined over the past eight months as independent exploration and production companies cut spending on new drilling as they focus more on earnings growth instead of increased output.

Production has continued to rise despite the decline in the rig count because productivity has increased in most basins this year, meaning drillers are getting more oil and gas out of each new well even though they are operating fewer rigs. 

The U.S. Energy Information Administration  this week projected U.S. crude output from seven major shale formations would rise by 85,000 barrels per day in September to a record 8.77 million bpd.

In total, the EIA projected U.S. oil production would rise to 12.27 million bpd in 2019 from a record 10.99 million bpd in 2018. 

U.S. energy firms this week increased the number of oil rigs operating for the first time in seven weeks despite plans by most producers to cut spending on new drilling this year.

Companies added six oil rigs in the week to Aug. 16, the biggest increase since April, bringing the total count to 770, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday. 

In the same week a year ago, there were 869 active rigs.

The oil rig count, an early indicator of future output, has declined over the past eight months as independent exploration and production companies cut spending on new drilling as they focus more on earnings growth instead of increased output.

Production has continued to rise despite the decline in the rig count because productivity has increased in most basins this year, meaning drillers are getting more oil and gas out of each new well even though they are operating fewer rigs.

The U.S. Energy Information Administration  this week projected U.S. crude output from seven major shale formations would rise by 85,000 barrels per day in September to a record 8.77 million bpd.

In total, the EIA projected U.S. oil production would rise to 12.27 million bpd in 2019 from a record 10.99 million bpd in 2018. 

Source: Reuters