Baker Hughes: U.S. Oil, Gas Rig Count Up 5 to 948 This Week

HOUSTON (Dow Jones Newswires), Jul. 31, 2009

The number of rigs drilling for oil and natural gas in the U.S. rose this week as the brisk decline in U.S. drilling activity showed some signs of stabilizing.

The number of oil and gas rigs climbed to 948, up five rigs from the previous week, according to data from oil-field services company Baker Hughes Inc (BHI). The number of gas rigs was 677, an increase of two rigs from last week, while the oil rig count rose to 261, an increase of four rigs. The number of miscellaneous rigs was 10, a decrease of one rig.

The number of gas rigs in use peaked at 1,606 in September.

Friday's report marked the second consecutive weekly increase, but analysts were hesitant to say that the uptick was part of a larger trend.

"The recent moves don't really indicate a bottoming," said Pax Saunders, an analyst with Houston-based Gelber & Associates.

In response to falling energy prices over the past several months, natural gas producers have sharply reduced their spending plans and rig counts to limit the flow of new gas supplies into the market.

Natural gas prices have plunged about 74% from last summer's highs amid robust production from U.S. onshore natural gas fields and slumping demand. Large industrial consumers have curbed gas use to cut costs during the recession.

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 September delivery on the New York Mercantile Exchange was recently down 14.1 cents, or 3.77%, at $3.602 a million British thermal units.  

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