U.S. energy firms added oil and natural gas rigs for the first time since March as some shale producers reverse production cuts with oil prices recovering from historic lows caused by a slump in fuel demand amid coronavirus lockdowns.
The oil and gas rig count, an early indicator of future output, rose 10 from a record low to 254 in the week to Aug. 21, energy services firm Baker Hughes Co. said in its weekly report. Prior to this week, the rig count hit record lows for 15 weeks.
The weekly increase in oil and gas rigs was the biggest gain since January.
U.S. oil rigs rose 11 to 183 this week, also their biggest rise since January. Gas rigs fell by one to 69, just one short of its record low.
Even though U.S. crude prices have jumped over 120% from April record lows spurred by coronavirus demand destruction, they are still down about 32% since the start of the year and have been largely rangebound since mid-June at between $37 and $43 per barrel.
On Aug. 21, it was trading around $42 per barrel on hopes global economies and energy demand will snap back as governments lift lockdowns.
Analysts said higher oil prices will encourage energy firms to slow rig count reductions and start adding units later this year.
U.S. financial services firm Cowen & Co. said the 45 independent E&P companies it tracks plan to slash spending by about 47% in 2020 versus 2019. That follows a capex reduction of roughly 9% in 2019 and an increase of around 23% in 2018.
Cowen also said that some E&Ps issued early estimates for 2021 that so far point to 8% drop in spending next year versus 2020.
Mexico Authorizes Exports from Altamira Fast LNG Project
2023-06-05 - Mexico’s Energy Secretariat issued an export permit to New Fortress Energy Inc. for its Altamira fast liquefaction facility slated to start LNG operations in third-quarter 2023.
What's Affecting Oil Prices This Week? (June 5, 2023)
2023-06-05 - Crude prices were affected by a number of international issues, including the U.S. debt limit resolution, OPEC+ production cuts and China's weak domestic demand.
LyondellBasell Pushes Back Houston Oil Refinery Closure
2023-06-02 - Petrochemical company LyondellBasell is delaying its exit from the refining sector and evaluating future options for its 700-acre site on the Houston Ship Channel.
US Natgas Up 2% on Forecast for More Demand, Record Exports to Mexico
2023-06-02 - Despite near record U.S. output and low amounts of gas flowing to LNG export plants, a price jump occurred.
Congress Approves Debt Ceiling, Keeps Pipeline Legislation Intact
2023-06-02 - Amendments to strike language that would expedite the long-stalled Mountain Valley Pipeline from the legislation failed, according to media reports.