Sept 2 The U.S. oil drilling rig count rose this
week for the ninth week in ten, but the pace of additions slowed
as crude prices hold below the key $50-a-barrel mark that
analysts and drillers say makes drilling more viable.
The U.S. oil rig count rose by one to reach 407 for the week
ended Sept. 2, compared with 662 a year ago, data from oil
services company Baker Hughes Inc showed on Friday.
The rig count was unchanged last week. Prior to that, it
grew for eight straight weeks, rising by 76 since the week ended
July 1, for the most number of rig additions n a row since April
"We could have a higher count for another week or so, given
the lag between oil price moves and the industry's reaction,"
said Jim Williams, analyst at WTRG Economics in London,
"But a lower rig count is also likely once we get to late
September and beyond, and once it becomes clear that OPEC
measures to jawbone the market won't last."
The Organization of the Petroleum Exporting Countries, led
by Saudi Arabia and other big Middle East crude exporters, will
meet non-OPEC producers led by Russia at informal talks in
Algeria between Sept. 26 and 28 to discuss a freeze output.
If that fails, OPEC is expected to continue trying to prop
up the market going into its policy meeting in Vienna on Nov.
On Friday, U.S. West Texas Intermediate (WTI)crude futures
rose 3 percent, hovering above $44 a barrel, helped by a
weaker dollar and comments by Russia supporting a production
Despite rebounding this year, oil trades at less than half
of mid-2014 peaks above $100 a barrel. WTI is also about $6 a
below the 2016 peak of $51.67 hit in June, a level that began
bringing drillers steadily back to the well pad.
Few analysts believe OPEC will be successful in making price
gains last, especially when the biggest crude exporters such as
Saudi Arabia and Iran are pumping all they could in a fight to
raise market share.
They think prices will come under pressure from renewed
worries over an oil glut.
U.S. government data on Wednesday showed a 2.3
million-barrel build in crude inventories in the last week, more
than double what the market had expected.
The rig count is one of several indicators of future oil and
gas production. Other indicators include drillers ability to get
more out of each well and the completion of drilled but
uncompleted wells or DUCs.
(Reporting by Barani Krishnan; Editing by Marguerita Choy)