UPDATE 1-U.S. natgas rig count hits 18-year low-Baker Hughes
* Gas-directed rig count hits lowest since June 1995 * Horizontal rigs climb slightly from 20-month low * Oil rig count gains for fifth time in 6 weeks NEW YORK, May 3 (Reuters) - The number of rigs drilling for natural gas in the United States fell this week for the second straight week, hitting its lowest level in nearly 18 years as producers continued to pull back from dry gas drilling. The gas-directed rig count slid by 12 this week to 353, its lowest since June 1995, when the count stood at 340, data from Houston-based Baker Hughes showed on Friday. Producers have mostly been curbing dry-gas drilling in favor of more profitable oil and liquids-rich plays such as Eagle Ford in Texas and Marcellus in Appalachia. But the 40 percent run-up in spot gas prices since mid-February to a 21-month high of $4.444 per million British thermal units just this week, had stirred concerns that gas output, still flowing at or near record highs, could increase in coming weeks. The oil-focused rig count rose by 22 to 1,403, its fifth gain in six weeks, Baker Hughes data showed. The oil count is up 48 rigs, or 3.5 percent, from the same week last year. Baker Hughes also reported that horizontal rigs, the type often used to extract oil or gas from shale, gained eight this week to 1,092, up from the 20-month low of 1,084 first hit four weeks ago. The horizontal count is down 8.5 percent from the record high of 1,193 set last May. Drilling for natural gas has mostly been in decline for the last 18 months. The count is down about 62 percent since peaking in 2011 at 936, but so far production has not slowed much, if at all, from the record high hit last year. On Thursday, data from the U.S. Energy Information Administration showed that gross gas production in February unexpectedly climbed after two straight monthly declines. The associated gas produced from more profitable shale oil and shale gas liquids wells has kept dry gas flowing at a brisk rate. The U.S. Energy Information Administration expects marketed gas production to edge up slightly in 2013 to its third straight yearly record. Gas futures prices, which were up about 1.5 cents in the $4.04 area just before the Baker Hughes data was released, were little changed from that level after the report.
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