HOUSTON (Dow Jones Newswires), Aug. 21, 2009
The number of rigs drilling for oil and natural gas in the U.S. rose this week as producers increased drilling activity on hopes of an economic recovery that will spur energy demand.
The number of oil and gas rigs climbed to 985, up 17 from the previous week, according to data from oil-field services company Baker Hughes Inc. The number of gas rigs was 695, an increase of seven rigs from last week, while the oil rig count climbed to 280, an increase of eight rigs. The number of miscellaneous rigs was 10, an increase of two rigs.
The number of gas rigs in use peaked at 1,606 in September 2008.
Producers have reined in oil and gas drilling over the past several months amid falling prices, but companies have begun putting some rigs back to work.
"There is optimism that prices will rebound," said Kent Bayazitoglu, an analyst with Houston-based Gelber & Associates.
Gas supplies remain ample. U.S. inventories are expected to approach maximum storage capacity before the winter. Swelling storage levels have contributed to a sharp price decline. Natural gas prices have dropped more than 75% from their highs last summer above $13/MMBtu. This week, prices dropped below $3/MMBtu for the first time in seven years.
Analysts anticipate that the sharp decline in natural gas drilling activity earlier this year will eventually bring supply back in line with demand and help bolster gas prices.
Gas for September delivery on the New York Mercantile Exchange was recently down 4.7 cents, or 1.6%, at $2.898 a million British thermal units.
Copyright (c) 2009 Dow Jones & Company, Inc.
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