Canadian rig count down by 10
Nov 23 (Reuters) – The US rig count rose this week, boosting the number of increments in November to the most in a month since July, as shale producers boost spending to capture forecast higher crude prices in coming months.
Drillers added three oil rigs in the week to Nov. 23, bringing the total count up to 474, the most since January, but still below the 555 rigs seen a year ago, energy services firm Baker Hughes Inc said on Wednesday.
Baker Hughes issued the report a couple days early due to the U.S. Thanksgiving day holiday on Thursday.
In November alone, drillers added 33, the most in a month since July.
Since crude prices recovered from 13-year lows to around $50 a barrel in May, drillers have added a total of 158 oil rigs in 23 of the last 26 weeks, its biggest recovery since a global oil glut crushed the market over two years.
The Baker Hughes 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 2016.
U.S. crude futures were trading around $48 a barrel on Wednesday, putting the contract on track to rise for a second week in a row on expectations the Organization of the Petroleum Exporting Countries will agree to limit production at the end of the month.
Analysts expect energy firms to follow through on plans to spend more to boost drilling and production with crude expected to rise in coming months and years.
Futures were trading near $51 a barrel for calendar 2017 and near $53 for calendar 2018, Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast the total oil and natural gas rig count would average 505 in 2016, 697 in 2017 and 908 in 2018. Most wells produce both oil and gas.
The combined oil and gas rig count was 593 in the week ended Nov. 23, according to Baker Hughes data.
That compares with an average of 978 oil and gas rigs active 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 18 exploration and production (E&P) companies, including Concho Resources Inc, planned to increase spending by an average of 36 per cent in 2017 over 2016.
Cowen said that forecast 2017 increase followed an estimated 48 per cent decline in 2016 and a 35 per cent decline in 2015 for the 65 E&P companies it tracks.
(Reporting by Scott DiSavino; Editing by Marguerita Choy)
