U.S. energy firms added the highest number of oil rigs in a week since January 2020 as higher oil prices in recent months have prompted drillers to return to the wellpad.
The combined oil and gas rig count, an early indicator of future output, rose 13 to 430 in the week to April 1, its highest since April 2020, Baker Hughes Co. said in its weekly report.
U.S. oil rigs rose by 13, the biggest weekly increase since January 2020, to 337 this week, their highest since April 2020. Natural gas rigs fell one to 91.
Baker Hughes released the rig count a day earlier than usual due to the U.S. Good Friday holiday on April 2.
The total oil and gas count is 430 rigs, or 35.2%, below this time last year.
The number of oil and gas rigs fell to a record low of 244 in August, according to Baker Hughes data going back to 1940, as the coronavirus pandemic crushed fuel demand and oil prices. However, with a recovery in prices, the rig count has risen for an eighth month and a second quarter in a row.
U.S. crude futures rose nearly 22% in the first quarter mainly on demand-recovery optimism after COVID-19 vaccines began to roll out in the new year. However, those hopes were dampened in March by a resurgence in infections and prices dropped 3.8% last month.
U.S crude were trading around $61 per barrel on April 1.
With prices mostly rising since October 2020, some energy firms said they plan to boost spending a bit in 2021 after cutting drilling and completion expenditures 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.
U.S. financial services firm Cowen & Co. said the 45 independent E&P companies it tracks plan to increase spending about 2% in 2021 versus 2020. That follows capex reductions of roughly 49% in 2020 and 12% in 2019.
The oil and gas rig count rose seven to 439 in the week to April 16, Baker Hughes Co. said in its weekly report.
Energy firms surveyed by the Kansas City Fed said crude oil prices would need to average around $53 per barrel for drilling to be profitable.
The combined oil and gas rig count rose two to 432 in the week to April 9, its highest since April 2020, Baker Hughes said in its weekly report.