U.S. drillers this week added oil and natural gas rigs for a 12th week in a row, the longest streak of additions since June 2017, as crude prices hit their highest in more than a year.
The oil and gas rig count, an early indicator of future output, rose five to 397 in the week to Feb. 12, its highest since May, energy services firm Baker Hughes Co said in its closely followed report on Friday.
Despite rising for six months in a row, that count is still 393 rigs, or 50%, below this time last year. The total count, however, has soared since hitting a record low of 244 in August, according to Baker Hughes data going back to 1940.
After falling to record lows below zero in April 2020 due to coronavirus demand destruction, U.S. crude futures climbed over $59 a barrel this week, their highest since January 2020.
Looking forward, however, U.S. crude futures were only trading around $58 a barrel for the balance of 2021 and $53 for calendar 2022, which could prompt some producers to reduce activity in the future.
U.S. oil rigs rose seven to 306 this week, their biggest weekly increase in almost a month, while gas rigs fell two to 90.
More than half the U.S. oil rigs are in the Permian basin in West Texas and eastern New Mexico where total units rose five to 203 this week, the most since May. Since falling to a record low of 117 in August, according to Baker Hughes data going back to 2011, the rig count in the shale formation has increased almost every week with the rise in oil prices.
So far in 2021, drillers have added 28 rigs in the Permian.