US drillers add oil rigs for 6th consecutive week - Baker Hughes
Reuters reported that US energy companies added oil rigs for a sixth week in a row as crude prices hovered near three-year highs, prompting more drillers to boost their spending plans for 2018. Drillers added 1 oil rig in the week to March 2, bringing the total count to 800, the highest level since April 2015, General Electric Co's Baker Hughes energy services firm said in its closely followed report.
That was the first time since June that drillers added rigs for six consecutive weeks. They added rigs for 23 weeks in a row between January and June 2017.
The US rig count, an early indicator of future output, is much higher than a year ago when 609 rigs were active as energy companies have continued to boost spending since mid-2016 when crude prices began recovering from a two-year crash.
US crude futures traded around $61 a barrel this week, close to levels hit in late January when prices rose to their highest since December 2014. That compares with averages of USD 50.85 in 2017 and USD 43.47 in 2016.
Looking ahead, futures were trading around $60 for the balance of 2018 and USD 56 for calendar 2019 . In anticipation of higher prices in 2018 than 2017, US financial services firm Cowen & Co said 58 of the roughly 65 exploration and production (E&P) companies they track, including EOG Resources Inc , have already provided capital expenditure guidance indicating an 11 percent increase in planned spending over 2017.
EOG boosted its 2018 capital expenditure budget to USD 5.4-5.8 billion, up from USD 3.7-USD 4.1 billion in 2017. Cowen said those E&Ps that have reported spending plans for 2018 planned to spend a total of USD 81.4 billion in 2018, up from an estimated USD 73.1 billion in 2017.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week kept their forecast for the total oil and natural gas rig count at an average of 1,015 in 2018 and 1,128 in 2019, the same as last week. So far this year, the total number of oil and natural gas rigs active in the United States has averaged 955.
Source : Reuters