For the first time since May, U.S. Energy Companies added oil and natural gas rigs for the fourth week in a row, boosted by higher oil prices, albeit drilling growth has been modest as producers choose spending restraint. The oil and gas rig count, a leading indicator of future output, increased by seven to 491 in the week ending July 23, the highest level since April 2020, according to Baker Hughes Co (BKR.N), an energy services provider.
Analysts at Gelber & Associates in Houston said, “Although total rigs are … double, the amount recorded at the low point in mid-August of last year, drilling activity remains historically low, and one would have to return to August of 2016 (excluding last year) to find a lower rig count.” Oil rigs in the United States increased by seven this week to 387, the highest level since April 2020, while gas rigs remained constant at 104.
According to Baker Hughes Chief Executive Lorenzo Simonelli, firms in North America would add roughly 50 rigs by the end of the year, with private companies stepping up activity at current prices. Even though oil and gas prices have risen at times this year, drilling in many places has remained low. To overcome natural dips and maintain production growth later this year, significant rig additions are still required.Energy services companies are profiting from a resumption of drilling fueled by increased crude prices, and Schlumberger (SLB.N) and Halliburton (HAL.N) both issued solid forecasts for the oil industry’s revival this week.