U.S. adding more rigs during the past week

U.S. energy firms added the highest number of oil rigs in a week since January 2020 as higher oil prices in recent months have prompted drillers to return to the wellpad.

U.S. oil rigs rose by 13, the biggest weekly increase since January 2020, to 337 this week, their highest since April 2020, and gas rigs fell one to 91. According to Enverus, the largest week-over-week increase was in the Gulf Coast, where eight new rigs were added, primarily in the Eagle Ford Shale. The Eaglebine play in the Gulf Coast region increased by three to five rigs running currently.

The number of oil and gas rigs fell to a record low of 244 in August, according to Baker Hughes data going back to 1940, as the coronavirus pandemic affected fuel demand and oil prices. However, with a recovery in prices, the rig count has risen for an eighth month and a second quarter in a row.

U.S. crude futures rose nearly 22% in the first quarter mainly on demand-recovery optimism after COVID-19 vaccines began to roll out in 2021. Though, those hopes were dampened in March by a resurgence in infections and prices dropped 3.8% last month.

WTI was trading around $61/bbl on April 1.

With prices mostly rising since October 2020, some energy firms said they plan to boost spending a bit in 2021 after cutting drilling and completion expenditures 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.

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