More rigs added during the past week
U.S. energy firms added oil and natural gas rigs for a second week in a row as oil prices recently rose to their highest since October 2018, prompting some drillers to return to the wellpad.
Over the past week, two rigs were added in Texas’ RRC Dist. 6 and two in Colorado. Additionally, one rig was added in Louisiana, North Dakota, West Virginia and Ohio plus one each in Texas RRC Dist. 7C and 8.
Baker Hughes said in its weekly report that the U.S. rig count is at its highest since April 2020. At roughly this time last year, the pandemic had done its worst to rig activity, dropping the total to 264 on July 5. The current rig count is up 99% year-over-year, as well as up 3% on the month.
According to Enverus, if you look at the differences between the July and August averages for the past seven years, you get a mean of four rigs added.
With oil prices up 46% so far this year, some energy firms have said they plan to boost spending in 2021 after cutting capex over the past two years. That spending increase, however, remains small as most firms continue to focus on boosting cash flow, reducing debt and increasing shareholder returns rather than adding output.
Many analysts said that rather than boosting output, the extra spending may only replace natural declines in well production.
U.S. crude oil production is expected to fall by 210,000 bbl/d in 2021 to 11.1 million bbl/d, according to the U.S. Energy Information Administration.
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