HOUSTON (Dow Jones Newswires), Jul. 17, 2009
The number of rigs drilling for oil and natural gas in the U.S. rose this week as an increase in oil drilling rigs offset a decline in natural gas drilling activity, according to industry data released Friday.
The number of oil and gas rigs rose to 920, an increase of four rigs from the previous week, according to oil field services company Baker Hughes Inc. The number of gas rigs was 665, a drop of seven rigs from last week, while the oil rig count rose to 244, an increase of 10 rigs. The number of miscellaneous rigs rose by one, to 11 rigs.
The number of gas rigs in use peaked at 1,606 in September.
Natural gas prices have plunged more than 70% from summer highs amid robust production from U.S. onshore natural gas fields and slumping demand. Large industrial consumers have scaled back gas use to cut costs during the recession. In response to falling gas prices, producers such as Chesapeake Energy Corp. and Devon Energy Corp. have slashed their spending plans and rig counts to curb the flow of new gas supplies into the market.
Analysts anticipate that the sharp decline in natural gas drilling activity will eventually bring supply back in line with demand and help bolster gas prices.
Gas for August delivery on the New York Mercantile Exchange was recently trading 9.3 cents higher, or 2.54%, at $3.761 a million British thermal units.
Copyright (c) 2009 Dow Jones & Company, Inc.
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