The U.S. oil and natural gas rig count rose this week for the first time in three weeks, as crude output slowly returns to pre-pandemic levels despite high prices as producers focus on returning money to shareholders and paying down debt.
The oil and gas rig count, an early indicator of future output, rose six to 733 in the week to June 10, its highest since March 2020, energy services firm Baker Hughes Co. said in its closely followed report on June 10.
Baker Hughes said that puts the total rig count up 272 rigs, or 59%, over this time last year.
U.S. oil rigs rose six to 580 this week, their highest since March 2020, while gas rigs were unchanged at 151 for a third week in a row.
Even though the combined rig count has climbed for a record 22 months in a row through May, weekly increases have only been incremental and oil production is still below pre-pandemic record levels of 12.3 MMbbl/d in 2019.
U.S. crude production is forecast to only rise about 700,000 bbl/d this year to 11.9 MMbbl/d and surpassing the record only in 2023 at 13 MMbbl/d, according to government data.
Since Moscow invaded Ukraine on Feb. 24, the U.S. government has urged drillers to produce more oil and gas to reduce domestic prices and help allies break their dependence on Russia energy.
Crude prices are up about 60% so far this year after soaring 55% in 2021, and a growing number of energy firms said they plan to boost spending for a second year in a row in 2022 after cutting drilling and completion expenditures in 2019 and 2020.
The 2021 spending increase, however, was small and much of it went toward completing DUC wells.
U.S. financial services firm Cowen & Co. said the independent E&P companies it tracks plan to boost spending by about 30% in 2022 versus 2021 after increasing spending about 4% in 2021 versus 2020.
That follows a drop in capital expenditures of roughly 48% in 2020 and 12% in 2019.
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