Oil report

U.S. oil drillers add rigs for 2nd time in 2016 -Baker Hughes

June 3 (Reuters) - U.S. energy firms this week added rigs
drilling for oil for the second time this year, energy services
company Baker Hughes Inc said on Friday, after crude
prices briefly tested a seven-month high over $50 a barrel over
the past two weeks.
    That is a key price level that analysts and producers have
said would likely trigger a return to the well pad.
    Drillers added 9 oil rigs in the week to June 3, bringing
the total rig count up to 325, compared with 642 a year ago,
Baker Hughes said in its closely followed report.
    Prior to this week, energy companies added only one rig so
far this year, during the week of March 18. They had cut on
average 10 oil rigs per week for a total of 220 so far this
    They cut on average 18 oil rigs per week for a total of 963
in 2015, the most since at least 1988 amid the biggest rout in
crude prices in a generation.
    The rig count has dropped since hitting a peak of 1,609 in
October 2014 as U.S. crude futures fell from over $107 a
barrel in mid-2014 to a near 13-year low around $26 in February.
    Since then, U.S. oil futures have jumped by about 90
percent, breaking through the $50 mark earlier this week. 
    Oil prices, however, were headed for a 1 percent loss this
week on signs the market was moving back to more balanced supply
and demand after a series of supply disruptions, ending three
consecutive weeks of price gains. 
    Looking ahead, crude futures were fetching nearly $50 for
the balance of 2016 and over $51 for calendar 2017
    U.S. oil executives and analysts have said any price rise
above $50 could fuel a resurgence in new drilling projects.
    Analysts at U.S. financial services firm Raymond James said
this week they believe the U.S. total natural gas and oil rig
count is at or near the bottom and a modest recovery is in store
for the back half of 2016.
    Raymond James, however, cut its estimated 2016 exit number
to 625 from 700, saying energy firms' efforts to complete
drilled but uncompleted wells, known in the industry as DUCs,
would impede the rig count from rising much higher this year.
    Analysts at Credit Suisse, meanwhile, forecast the U.S. rig
count would average 470 this year, 600 in 2017 and 718 in 2018.

 (Reporting by Scott DiSavino; Editing by Meredith Mazzilli)