• Monday, February 26, 2024
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U.S. oil drillers add rigs despite crude prices collapse -Baker Hughes


U.S. energy firms added six oil rigs this week, continuing a recent trend of increases, even after U.S. crude oil prices plunged 25 percent from a recent high in June, data showed on Friday.

That was a sign some drillers followed through on plans to add rigs announced in May and June when U.S. crude futures averaged $60 a barrel. U.S. crude futures so far this week however have traded around $45.

The rig count gain this week was the third increase in a row, the longest winning streak since September 2014, bringing the total rig count up to 670, the highest since early May, oil services company Baker Hughes Inc said in its closely followed report.

Drillers added oil rigs in three of the four major U.S. shale oil basins, with five in the Permian in West Texas and eastern New Mexico and one each in the Bakken in North Dakota and Montana and the Eagle Ford in South Texas. The number of oil rigs operating in the Niobrara basin in Colorado and Wyoming held steady at 24.

U.S. crude futures were on track for a sixth down week in a row, the longest losing streak since January. U.S. crude futures were little changed at down 1.3 percent on Friday after Baker Hughes released its report.

Analysts said U.S. crude futures were trading at their lowest level since March on lackluster global demand growth and lingering oversupply concerns.

Over the past month some of that surplus crude has been turned into refined products. Stocks of crude oil and refined products in the United States are near their highest levels since the early 1990s, while gasoline futures on Friday traded at their lowest level since February as the summer driving season winds down.

Analysts noted the expected reaction to low oil prices was a reduction in supply and an increase in demand. U.S producers did cut spending, eliminate thousands of jobs and idle around 60 percent of the record high 1,609 oil rigs that were active in October in reaction to a near 60 percent U.S. oil price collapse from $107 in June 2014 to under $44 in January.

But, despite the spending cuts, U.S. crude production last week edged up to 9.5 million barrels per day, near its highest level since the early 1970s, according to government data.