U.S. natural gas rig count climbs to fresh 11-mth high

* Higher U.S. gas prices keep rig count rising

* Rig count still down year-on-year

NEW YORK Feb 12 (Reuters) - The number of rigs drilling for natural gas in the United States climbed 13 this week to a fresh 11-month high of 891, according to a report on Friday by oil services firm Baker Hughes in Houston.

The latest gas rig count is the highest since March 6, 2009, when there were 916 gas rigs operating.

The U.S. natural gas drilling rig count has rebounded 34 percent after bottoming at 665 on July 17, its lowest level since May 3, 2002, when there were 640 active gas rigs.

But the rig count is still well off its recent peak above 1,600 in September 2008, and still stands at 163 rigs below the same week last year.

Many gas producers had scaled back drilling operations earlier last year with credit tight and natural gas cash prices sinking during summer to about $2 per million British thermal units (mmBtu), a 7-1/2 year low and down some 85 percent from July 2008 highs above $13.

But cash gas prices have more than doubled since hitting their late summer lows, hovering in the $5.50 area this week, a level high enough to encourage more onshore drilling, particularly in some of the prolific shale basins.

While drilling is still down over the past year or so, traders noted production has not slowed that much, with recent government data estimating that January marketed gas output will be about 2.3 percent lower than in January 2009.

Some traders said rig cuts eventually may be necessary to balance the market unless demand, particularly from the industrial sector, starts to recover with the economy, but few expected to see any significant rig declines with cash prices at current levels. (Reporting by Edward McAllister; Editing by Lisa Shumaker)