Baker Hughes: US Drillers Add Oil Rigs For Sixth Consecutive Week
May 11 (Reuters) - U.S. energy companies added oil rigs for a sixth week in a row as crude prices continue to soar to multi-year highs after new sanctions on Iran are anticipated to take some supply out of the market, further supporting U.S. drilling and pushing production to record highs.
Drillers added 10 oil rigs in the week to May 11, bringing the total count to 844, the highest level since March 2015, General Electric Co's Baker Hughes energy services firm said in its closely followed report on Friday.
That was the first time energy firms added rigs for six weeks in a row since early March.
More than half the total oil rigs are in Permian basin in west Texas and eastern New Mexico, the nation's biggest shale oil field. Active units there increased by five this week to 463, the most since January 2015.
The U.S. government expects oil output in the Permian to rise to a record high near 3.2 million barrels per day in May, about 30 percent of total U.S. oil production.
The U.S. rig count, an early indicator of future output, is much higher than a year ago when 712 rigs were active as energy companies have been ramping up production in tandem with OPEC's efforts to cut global output in a bid to take advantage of rising prices.
U.S. crude output has surged since 2010, fueled by output from formations in states including Texas, New Mexico and North Dakota. Amid the recovery in prices and drilling, production this year surpassed a previous long-standing output record.
The U.S Energy Information Administration on Tuesday projected average annual U.S. oil output would rise 1.37 million bpd to a record high 10.72 million bpd in 2018 and 11.86 million bpd in 2019.
Texas energy regulators said in a report this week the state issued a third more oil and gas drilling permits in April than a year ago as higher prices continue to spur an increase in activity.
After the United States pulled out of the Iran nuclear deal earlier in this week, U.S. crude futures were trading around $71 a barrel, their highest since November 2014. That is up sharply from the $50.85 average hit in 2017 and $43.47 in 2016.
Looking ahead, futures were trading around $70 for the balance of 2018 and $65 for calendar 2019.
In anticipation of higher prices, U.S. financial services firm Cowen & Co this week said the exploration and production (E&P) companies they track have provided guidance indicating a 12 percent increase this year in planned capital spending.
Cowen said those E&Ps expect to spend a total of $81 billion in 2018, up from an estimated $72.4 billion in 2017.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast average total oil and natural gas rig count would rise to 1,020 in 2018 and 1,135 in 2019, up from an earlier projection of 1,015 in 2018 and 1,130 in 2019.
So far this year, the total number of oil and gas rigs active in the United States has averaged 983, up sharply from an average of 876 rigs in 2017 and on track to be the highest since 2014, which averaged 1,862 rigs. Most rigs produce both oil and gas.
(Reporting by Scott DiSavino Editing by Marguerita Choy)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Blockchain Demands Attention in Oil and Gas
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- CNPC Opens Sea-Land Oil Storage and Transport Facility in Bangladesh
- Oman Sees Increasing Ship-to-Ship Transfers of Russian Oil Bound for India
- US Govt Makes Record Investment of $6B for Industrial Decarbonization
- Perenco Still Searching for Missing Person After Platform Incident
- Eni, Fincantieri, RINA Ink Deal on Maritime Decarbonization
- Oil Falls as US Inventories Increase
- Czech Utility CEZ Bucks Weaker Prices, Demand to Log Record Annual Profit
- Ithaca Energy Studies Deal for Eni's UK Upstream Assets
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- UK Grid Operator Receives Aid to Advance Rural Decarbonization
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call