April 21, 2017 / 5:04 PM / 5 months ago

U.S. drillers add oil rigs for 14th week in a row -Baker Hughes

    April 21 (Reuters) - U.S. drillers added oil rigs for a 14th
week in a row, extending an 11-month recovery that is expected
to boost U.S. shale production in May in the biggest monthly
increase in more than two years.
    Drillers added five oil rigs in the week to April 21,
bringing the total count up to 688, the most since April 2015,
energy services firm Baker Hughes Inc         said on Friday.
RIG-OL-USA-BHI 
    That is more than double the same week a year ago when there
were only 343 active oil rigs.
    U.S. crude futures        dropped below $50 a barrel on
Friday, for the first time in two weeks and putting it on track
for its biggest weekly loss in six weeks, due to doubts the
OPEC-led production cut will restore balance to an oversupplied
market, especially as U.S. drillers keep producing more oil.
     
    U.S. shale production in May was set for its biggest monthly
increase in more than two years as producers stepped up their
drilling activity, according to U.S. energy data.             
    Analysts projected U.S. energy firms would boost spending on
drilling and pump more oil and natural gas from shale fields in
coming years with energy prices expected to climb.
    Futures for the balance of 2017           were fetching
around $50 a barrel and calendar 2018           was trading at
about $51.
    After taking a hit last year when dozens of U.S. shale
producers filed for bankruptcy, private equity funds raised
$19.8 billion for energy ventures in the first quarter - nearly
three times the total compared with the same period last year,
according to financial data provider Preqin.             
    Analysts at Simmons & Co, energy specialists at U.S.
investment bank Piper Jaffray, this week forecast the total oil
and gas rig count would average 842 in 2017, 1,037 in 2018 and
1,170 in 2019. Most wells produce both oil and gas.
    That compares with an average of 762 so far in 2017, 509 in
2016 and 978 in 2015, according to Baker Hughes data.
    Analysts at U.S. financial services firm Cowen & Co said in
a note this week that its capital expenditure tracking showed 57
exploration and production (E&P) companies planned to increase
spending by an average of 50 percent in 2017 over 2016.
    That expected spending increase in 2017 followed an
estimated 48 percent decline in 2016 and a 34 percent decline in
2015, Cowen said according to the 64 E&P companies it tracks.

    
 (Reporting by Scott DiSavino; Editing by Marguerita Choy)
  
 
 

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