July 9 (Reuters) - U.S. energy firms added oil and natural
gas rigs for a second week in a row as oil prices recently rose
to their highest since Oct. 2018, prompting some drillers to
return to the well pad.
The oil and gas rig count, an early indicator of future
output, rose 4 to 479 in the week to July 9, its highest since
April 2020, energy services firm Baker Hughes Co said in
its closely followed report on Friday. <RIG-USA-BHI>
That put the total rig count 221 rigs, or 85.7%, higher than
this time last year. It was also up 49% since falling to a
record low of 244 in August 2020, according to Baker Hughes data
going back to 1940.
U.S. oil rigs rose 2 to 378 this week, their highest since
April 2020, and gas rigs also rose 2 to 101.
"We're in a new world- there's lot of concerns about
regulatory issues, so they're going to be very cagey on raising
rig counts and if you're not going to raise it with the type of
run up we've seen in oil supplies, you're probably not going to
rise much at all," said Phil Flynn, senior analyst at Price
Futures Group in Chicago
With oil prices up 46% so far this year, some energy firms
have said they plan to boost spending in 2021 after cutting
expenditure 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.
Many analysts said that rather than boosting output, the
extra spending may only replace natural declines in well
U.S. crude oil production is expected to fall by 210,000
barrels per day in 2021 to 11.10 million bpd, the U.S. Energy
Information Administration said on Wednesday.
(Reporting by Scott DiSavino and Nakul Iyer; Editing by Chizu