Baker Hughes found that US excavators are adding most O & G rigs

US energy companies have added the most oil and natural gas rigs in the week since April, as more drillers are returning to well pads this week due to rising oil prices.

Oil and gas rigs, an early indicator of future production, increased from 13 to 601 in the week leading up to January 14, the highest since April 2020, Baker Hughes said in a weekly report. .. Compared to this period last year, the total number increased by 228, or 61%.

US oil rigs rose from 11 to 492 this week, the highest since April 2020, while gas rigs rose from 2 to 109, the highest since March 2020. did. The total is 50, the highest since April 2020. Hainesville Shale in Texas, Louisiana and Arkansas has increased from 3 to 52, the highest since November 2019.

US crude oil futures are trading at around $ 84 a barrel on Friday, and the deal is on a rising track for the first time since October for the fourth straight week.

After a 55% rise in 2021, oil prices have risen about 12% so far this year, with exploration and production (E & P) companies planning to increase spending for the second consecutive year in 2022. increasing.

The number of rigs has continued to rise record for 17 consecutive months, but US oil production will begin in 2021 as many energy companies focus more on returning to investors than on increasing production. It has decreased.

US oil production is projected to exceed 2019’s record level of 12.3 million barrels (bpd) per day next year as a result of a coronavirus pandemic that has crushed demand and prices. The government predicts that production will increase from 11.2 million barrels in 2021 to 11.8 million barrels in 2022 and 12.4 million barrels in 2023.

Mizuho said it would need to increase rig activity across the five largest oil plays in the United States by about 13 each week to reach a sustainable plateau to maintain current oil volumes in 2022. week.

“We continue to believe that drilling activity will be the upper limit of US supply growth, which is positive for commodities and large cap E & P,” the bank said.

(Reuters)