U.S. energy companies kept the oil rig count unchanged this week amid a steady decline in crude prices, which hit a near two-month low earlier this week.
The rig count, an early indicator of future output, held at 869 in the week to Aug. 17, Baker Hughes, a GE company (NYSE: BHGE), said in its weekly report.
U.S. crude futures were on track to fall for the seventh straight week as global trade disputes fueled concerns about slowing economic growth, which could hurt the demand for energy.
The U.S. rig count is much higher than a year ago when 763 rigs were active. Energy companies have been ramping up production in tandem with OPEC’s efforts since the start of 2017 to cut global output.
So far this year, U.S. oil futures have averaged $66.30 per barrel. That compares with averages of $50.85 in 2017 and $43.47 in 2016.
Looking ahead, crude futures were trading at $65 for the balance of 2018 and $63 for calendar 2019.
In anticipation of higher prices in 2018 than 2017, U.S. financial services firm Cowen & Co. this week said the E&P companies they track have provided guidance indicating an 18% increase this year in planned capital spending.
Cowen said those E&Ps expect to spend a total of $85.3 billion in 2018, up from an estimated $72.2 billion in 2017.
Analysts at Simmons & Co., energy specialists at U.S. investment bank Piper Jaffray, this week forecast average total oil and natural gas rig count would rise from 876 in 2017 to 1,031 in 2018, 1,092 in 2019 and 1,227 in 2020, little-changed from last week.
A total of 1,057 oil and gas rigs are currently in service.
So far this year, the total number of oil and gas rigs active in the United States has averaged 1,013. That keeps the total count for 2018 on track to be the highest since 2014, which averaged 1,862 rigs. Most rigs produce both oil and gas.
U.S. crude oil production in 2018 is expected to rise 1.31 million barrels per day (MMbbl/d) to 10.68 MMbbl/d, lower than July’s forecast of growth of 1.44 MMbbl/d to 10.79 million, according to the U.S. Energy Information Administration.
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