U.S. energy firms this week added oil and natural gas rigs for a third week in a row as relatively high oil prices encourage companies to drill more.
The oil and gas rig count, an early indicator of future output, rose three to 782 in the week to Nov. 18, its highest since March 2020, energy services firm Baker Hughes Co. said in its closely followed report.
Baker Hughes said that puts the total rig count up 219 rigs, or 39%, over this time last year.
U.S. oil rigs rose one to 623 this week, their highest since March 2020, while gas rigs rose two to 157.
Even though the rig count increased during most months over the past two years, weekly increases have averaged zero since the start of the pandemic in March 2020, helping keep oil production below record levels seen before the pandemic as many companies focus more on returning money to investors and paying down debt rather than boosting output.
The U.S. Energy Information Administration (EIA) cut its forecast for next year's crude output growth by 21%, days after heads of oil producers warned of persistent inflation and supply- chain constraints.
U.S. crude production was on track to rise from 11.3 million bbl/d in 2021 to 11.8 million bbl/d in 2022 and 12.3 million bbl/d in 2023, according to federal energy data. That compares with a record 12.3 million bbl/d in 2019.
But with oil prices still up about 5% so far this year after soaring 55% in 2021—and pressure from the government to produce more—several energy firms have 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.
2022-11-21 - The Wall Street Journal earlier on Nov. 21 reported an output increase of 500,000 bbl/d was under discussion for the next OPEC+ meeting.
2022-11-14 - OPEC filed its last report before its next meeting, scheduled to take place on on Dec. 4.
2022-10-06 - Price hike was expected after the announcement to cut output by 2 MMbbl/d.
2022-10-10 - "Reduced output allocations have blunted the bearish momentum building up in the market and encouraged at least some fund managers to rebuild positions in anticipation of renewed tightness and higher prices," according to columnist John Kemp.
2022-10-18 - "I would like to reiterate that there is nothing political about any decision we take in OPEC," UAE energy minister Suhail al-Mazrouei said of OPEC's recent unanimous decision to cut production targets.