U.S. energy firms this week added oil and natural gas rigs for an eighth week in a row for the first time since June 2018 as producers keep returning to the wellpad after crude prices held around $40 a barrel from mid June-late October.
The oil and gas rig count, an early indicator of future output, rose four to 300 in the week to Nov. 6, the highest since May, energy services firm Baker Hughes Co said in its closely followed report on Friday.
The total rig count fell to a record low of 244 during the week ended Aug. 14, while oil rigs alone fell to a 15-year low of 172 in the same week, according to Baker Hughes data going back to 1940.
U.S. oil rigs rose five to 226 this week, their highest since May, while gas rigs fell by one to 71, according to Baker Hughes data.
U.S. crude prices briefly fell below $35 a barrel for a second week in a row this week, to their lowest since May, after previously holding around $40 from mid June-late October.
Even though the oil contract was down about 39% since the start of the year, it was still up about 98% over the past seven months mostly on hopes global economies and energy demand will return when governments lift coronavirus lockdowns.
U.S. financial services firm Cowen & Co said the 45 independent exploration and production (E&P) companies it tracks plan to slash spending by about 48% in 2020 versus 2019. That follows a capex reduction of roughly 12% in 2019 and an increase of around 23% in 2018.
Cowen also said that some E&Ps issued early estimates for 2021 that so far point to an 7% drop in spending next year versus 2020.
