U.S. energy companies added oil and natural gas drilling rigs this week for the fifth consecutive week. This was the first since November. Crude prices rose to a seventh week high, surpassing levels seen since 2014. Drillers are now looking for more oil.
Baker Hughes Co, an energy services company, stated that the oil and gas rig count, which is an indicator of future output, rose to 613 in the week to February 4, its highest level since April 2020.
The rig count has increased for 18 consecutive months, but the weekly increases have been small and oil production is still below pre-pandemic levels. Many companies are more concerned with returning money to investors than increasing output.
Baker Hughes stated that this brings the total number of rigs up to 221, or 56%, compared to last year.
U.S. oil production rose by two to 497 this past week, their highest level since April 2020. Meanwhile, gas rigs grew from one to 116, their highest level since January 2020.
U.S. crude oil futures were at $93 per barrel Friday, their highest level since September 2014. This puts the contract on track for the eighth week of gains, the first time since October 2021.
Ryan Lance, ConocoPhillips’ Chief Executive at COP.N, warned Thursday that high oil prices could cause the United States to increase production too fast and lead to an oversupply
Lance stated that if we get back to the same level of growth in America as the 2014-2015 shale boom and “you are not worried about it”, he said to investors during a conference phone call.
ConocoPhillips has a 10-year plan that focuses on single-digit volume growth in its Permian shale business. Meanwhile, Exxon Mobil Corp (XOM.N) is aiming to increase its output from the largest U.S. Shale basin by 25% this fiscal year and a similar increase in 2021
Enverus, the data provider, published its own rig count data. Drillers added 14 more rigs over the past week. The total was now 720 as of February 2.
Enverus stated that the Permian saw the largest increase (plus 11 drills to 278). Pioneer Natural Resources Co (PXD.N.) is most active with 26 rigs. The Gulf Coast, with nine rigs up to 90, is where ConocoPhillips has the most active operator with five
