UPDATE 1-US natgas rig count rises, 1st time in 3 weeks-Baker Hughes
* Gas rig count climbs 2 after two straight declines * Horizontal rigs rise for third time in 4 weeks * Oil rig count up 10 to 1,372, 2nd gain in 3 weeks NEW YORK, Oct 4 (Reuters) - The number of rigs drilling for natural gas in the United States rose this week for the first time in three weeks, climbing by two to 378, data from Houston-based Baker Hughes showed on Friday. The gas-directed rig count, which posted a six-month high of 401 three weeks ago, has increased in nine of the last 15 weeks and is above the 18-year low of 349 set in late June. A rising gas rig count can stir talk that new pipelines and processing plants, particularly in the East, may be encouraging producers to hook up more wells and pump more supply into an already well-supplied market. Gas futures prices on Friday, which were up slightly at $3.502 per million British thermal units just before rig data was released at 1:01 p.m. (1701 GMT), slipped about a penny after the report. The oil-focused rig count rose for the second time in three weeks, gaining 10 to 1,372. The oil rig count hit a nine-month high of 1,413 in mid-June, Baker Hughes data showed. The oil count is down 26 rigs, or 1.9 percent, from the same week last year. Baker Hughes reported horizontal rigs, the type often used to extract oil or gas from shale, notched their third increase in the last four weeks, adding 14 to 1,099. The horizontal count is down 7.9 percent from the record high of 1,193 set in May 2012. While the gas rig count is off 60 percent since peaking in October 2011 at 936, gas production has not slowed much, if at all, from the record high hit last year. The associated gas produced from more profitable shale oil and shale gas liquids wells has kept dry gas flowing at or near a record pace. U.S. Energy Information Administration data earlier this week showed that gross gas production in July climbed to a record high of 74.52 billion cubic feet per day, about 1.8 bcfd, or 2.5 percent, above the year-earlier month. The EIA still expects U.S. gas production to hit a record high in 2013 for the third straight year.