[Editor's note: This article was updated at 2:20 p.m. July 9.]
U.S. energy firms added oil and natural gas rigs for a second week in a row as oil prices recently rose to their highest since October 2018, prompting some drillers to return to the wellpad.
The oil and gas rig count, an early indicator of future output, rose four to 479 in the week to July 9, its highest since April 2020, Baker Hughes Co. said in its weekly report.
That put the total rig count 221 rigs, or 85.7%, higher than this time last year. It was also up 49% since falling to a record low of 244 in August 2020, according to Baker Hughes data going back to 1940.
U.S. oil rigs rose two to 378 this week, their highest since April 2020, and gas rigs also rose two to 101.
“We’re in a new world. There’s lot of concerns about regulatory issues, so they’re going to be very cagey on raising rig counts and if you’re not going to raise it with the type of run up we’ve seen in oil supplies, you’re probably not going to rise much at all,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
With oil prices up 46% so far this year, some energy firms have said they plan to boost spending in 2021 after cutting expenditure 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.
Many analysts said that rather than boosting output, the extra spending may only replace natural declines in well production.
U.S. crude oil production is expected to fall by 210,000 barrels per day in 2021 to 11.10 million bbl/d, the U.S. Energy Information Administration said July 7.
Plano, Texas-based Vine Energy aims to become the first natural gas producer in the Haynesville Basin to certify 100% of its assets as “responsibly sourced” through an agreement with Project Canary.
While Diamondback Energy and Continental Resources beat Wall Street profit estimates, Pioneer Natural Resources only met expectations, but declared an inaugural variable dividend to be paid during the third quarter.
Separately, Chevron announced the retirement of Joe Geagea, executive vice president of technology, projects and services who retires with 40 years of service at the U.S. oil major.