Drillers in the U.S. added new oil and gas rigs for a second week in a row, establishing a new record and increasing chances of raised output for the future. Baker Hughes data showed.
Firstly, as crude prices boost to their highest point since 2019, oil and gas rigs rose to more than 403 in the week ending in March 5, Baker Hughes said. This new rig count is the highest since May.
Secondly, the rig count has had a steady rise since the past seven months, after they dropped to a low record of 244 last August, when the pandemic was still at one of its peaks. However, with the vaccine rollout around the world and economic recovery getting nearer, rig count also rose.
Separately, oil rigs rose to 310 this week; the highest record since May, as said above; while gas rigs remained somewhat unchanged at 92.
On the other hand, according to data from Enverus, the most active drillers, as of Wednesday were EOG Resources, with 22 new rigs; Pioneer Natura Resources, with 21 more; also, Devon Energy, with 17 more; also, Occidental Petroleum, with 15; and Conoco Phillips with 14.
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Drillers increase rig count, but production still cautious
Enverus report also highlights that the Permian Basin, among all, is the one with the most increased drilling activity over the week. In fact, it gained nine more rigs during the week.
The past few months have been strong for oil prices, reaching $66 per barrel this week, closing at their highest since 2019. OPEC production cuts and its cautious behavior towards increasing it, have been factors for the increase.
In fact, this week Saudi Arabia and other top oil producers from the organization, this week decided to maintain production cuts, despite the bullish sentiment. This after Milan faced covid-19 restrictions again.
On the other hand, companies are starting to increase little by little their spending on production for 2021; however, in comparison with the focus of companies to increasing cashflow and debt management, it is still small.