U.S. energy companies added the most oil rigs in four years’ time this week as crude prices held at their highest level since 2014. Drillers are now seeking more profit.
Oil and gas rig counts, which are early indicators of future output, increased 22 in the week ending February 11, making it the largest increase since February 2018. According to Baker Hughes Co, an energy services company, the 635 mark was the highest since April 2020.
Baker Hughes stated that the total number of rigs was up 238 or 60% over last year.
U.S. oil production rose 19 to 516 last week, their highest level since April 2020. Meanwhile, gas rigs rose 2% to 118, their highest level since January 2020.
More than half of U.S. oil rigs are located in Permian Shale in West Texas and Eastern New Mexico. Total units increased seven to 301 this week, the highest increase since April 2020. This was the largest weekly increase in the basin since Jan 2021.
U.S. crude oil futures were close to $92 per barrel, their highest level since 2014.
After a record 18-month stretch of rising oil prices, the combined rig count has increased by 23% this year.
Analysts noted that U.S. production declined in 2021 because many energy companies were more focused on making money for investors than increasing output.
According to government projections, production is still below the 2019 record of 12.3 Million barrels per day (bpd). Production is projected to increase from 11.2million bpd by 2021 to 12.0million bpd in 2022 to 12.6 million in 2023.
Cowen & Co, a U.S. financial service firm, stated that the independent exploration-production (E&P), companies it tracks have plans to increase spending by 25% in 2022 versus 20% in 2021 after increasing spending by 4% in 2021 versus 2010.
This is due to a decrease in capital expenditures of approximately 48% in 2020, and 12% in 2019, respectively.
