(Corrects to remove reference in paragraph 11 to Chevron
raising its budget for the year. Chevron has cut its budget.)
NEW YORK Feb 27 U.S. drillers added oil rigs
for a sixth consecutive week, extending a nine-month recovery as
shale producers ramp up spending to take advantage of a recovery
in oil prices.
Drillers added five oil rigs in the week to Feb. 24,
bringing the total count up to 602, the most rigs since October
2015, energy services firm Baker Hughes Inc said on
During the same week a year ago, there were 400 active oil
Since crude prices first topped $50 a barrel in May after
recovering from 13-year lows last February, drillers have added
a total of 286 oil rigs in 35 of the past 39 weeks, the biggest
recovery in rigs since a global oil glut crushed the market over
two years starting in mid 2014.
The oil rig count plunged from a record 1,609 in October
2014 to a six-year low of 316 in May as U.S. crude collapsed
from over $107 a barrel in June 2014 to near $26 in February
On Friday, U.S. crude futures were up about 1 percent
on the week but lower on the day at around $54 a barrel on
Friday, amid the market's concerns over whether a surge in U.S.
production will dampen efforts by the Organization of the
Petroleum Exporting Countries (OPEC) and other producers to
drain a global oil glut.
Production increases in the United States, predominantly
from onshore shale plays, could potentially limit further
increases in oil prices during 2017/18.
Futures for the balance of 2017 were trading
around $54.75 a barrel, while calendar 2018 was
fetching less than $54.40.
U.S. producers have signaled higher capital spending and
further production growth, perhaps beyond what many analysts
expect, Citi Research said in an investor note this week.
"The global crude stock draws expected would be partially
offset by the outperformance of U.S. production, which might
upset calculations of core OPEC countries in lifting prices,"
Oil and gas producer Apache Corp said on Thursday it
would spend $3.1 billion in 2017, 63.2 percent more than it did
last year, joining Exxon Mobil Corp and Hess Corp
in boosting their capital budgets.
The surge in drilling activity can be seen in the oilfield
Investment bank Raymond James, which predicts the rig count
could approach 1,000 by the end of 2018, estimated frac sand
demand would hit record levels this year at roughly 55 million
tons and exceed 80 million tons by next year, 60 percent above
2014 levels, due in large part to producers requiring more sand
(Reporting By Jarrett Renshaw; Editing by Marguerita Choy)