US adds oil rigs at fastest pace since 2012

American energy firms to boost spending on drilling and pumping more oil and natural gas from shale fields

US energy companies accelerated the rate of growth in oil rigs added over the past four weeks by the most since 2012 as drillers take advantage of a rise in crude prices since the Organisation of Petroleum Exporting Countries (Opec) agreed to cut supplies in late November.

Drillers added eight oil rigs in the week to February 10, bringing the total count up to 591, the most since October 2015, energy services firm Baker Hughes Inc said on Friday. During the same week a year ago, there were 439 active oil rigs.

The average rate of rig additions over the past four weeks increased to 17, its highest rate of growth since February 2012, Baker Hughes data showed.

Since crude prices first topped $50 (Dh183) a barrel in May after recovering from 13year lows last February, drillers have added a total of 275 oil rigs in 33 of the past 37 weeks, the biggest recovery in rigs since a global oil glut crushed the market over two years starting in mid 2014.

Baker Hughes oil rig count plunged from a record 1,609 in October 2014 to a six-year low of 316 in May as US crude collapsed from over $107 a barrel in June 2014 to near $26 in February 2016.

Production cut

US crude futures traded around $54 a barrel on Friday, putting the contract on track for an eighth week of gains in the last nine, as Opec and other producers cut production in an effort to end a global oil glut and raise prices.

Analysts said they expect US energy firms to boost spending on drilling and pump more oil and natural gas from shale fields in coming years now that energy prices are projected to keep climbing.

Futures for the balance of 2017 were trading around $55 a barrel, while calendar 2018 was fetching near $56.