U.S. energy firms added two natural gas rigs and kept the number of oil rigs unchanged this week, energy services firm Baker Hughes Co. said April 9, with analysts forecasting more rigs were needed to keep production steady.

The combined oil and gas rig count, an early indicator of future output, rose two to 432 in the week to April 9, its highest since April 2020, Baker Hughes said in its weekly report.

That puts the rig count up 77% since falling to a record low of 244 in August 2020, according to Baker Hughes data going back to 1940. The total count, however, is still 170 rigs, or 28%, below this time last year.

U.S. oil rigs were steady at 337 this week, while gas rigs rose two to 93, both near one-year highs. In April 2020, after the start of the COVID-19 pandemic, drillers slashed a total of 263 rigs as travel restrictions crashed oil demand and prices.

Analysts at Goldman Sachs forecast the total U.S. rig count would rise to an average of 480 to 500 rigs by fourth-quarter 2021 with most of that increase coming from the Permian Basin in Texas and New Mexico (35 to 45 rigs), Eagle Ford in Texas (five to 10 rigs) and Bakken in North Dakota (three to five rigs).

“We believe that the U.S. needs a total of about 500 active rigs to keep production flat,” Goldman Sachs said.

Energy research firm East Daley lifted its rig and production outlook for the Permian following a 22% rally in U.S. West Texas Intermediate (WTI) futures during the first quarter.

“We project Permian drilling to grow by 70+ rigs by early 2022 to over 285 basin rigs, setting the stage for a new multi-year growth cycle in Permian oil and gas production if oil prices can hold recent gains,” East Daley said.

WTI prices, which have gained in four of the past five months, were down this week on worries about rising global production and weaker demand than before the coronavirus pandemic.

After falling to a record low of 433 rigs on average in 2020, according to Baker Hughes data going back to 1988, U.S. investment bank Piper Sandler’s energy specialist Simmons Energy forecast the count would rise to 451 in 2021 and 558 in 2022.

That is the same as Simmons forecast since late March.

Baker Hughes said the annual average rig count peaked at 1,919 in 2012.