U.S. drillers added oil rigs for a 13th week in a row, with the number of active rigs rising to near a two-year high, as energy companies boost spending on new production to take advantage of a recovery in crude prices.
Drillers added 11 oil rigs in the week to April 13, bringing the total count to 683, the highest since April 2015, energy services firm Baker Hughes Inc. (NYSE: BHI) said on April 13. At this time a year ago, there were 351 active oil rigs.
Much of the weekly gain can be attributed to Texas's Permian Basin, which added eight rigs on the week. There are 339 active rigs in the Permian, located largely in the western part of Texas, 200 more than at this time last year.
U.S. crude futures were little changed on April 13 and did not react much to the rig count figures. U.S. West Texas Intermediate was at $53.02 a barrel, down 9 cents, as of 1:24 p.m. EDT (1724 GMT).
Even as the world’s major oil producing nations have attempted to reduce crude supply, U.S. inventories are at near-record highs at 533.4 million barrels (MMbbl). Overall domestic production has continued to climb, meanwhile, hitting 9.24 MMbbl/d last week, according to the U.S. Energy Department.
The U.S. Energy Information Administration had projected a 9.22 MMbbl/d production rate for 2017 and expects production to hit a record 9.9 MMbbl/d 2018.
Analysts see U.S. energy firms boosting spending on drilling and pumping more oil and natural gas from shale fields in coming years with energy prices expected to climb. That has unnerved OPEC, which is trying to reduce a glut that has persisted for about three years.
Futures for the balance of 2017 and calendar 2018 trade at around $54 a barrel, indicating expectations for stable prices going forward.