(Reuters) - U.S. drillers added oil rigs for a seventh week in a row, extending a recovery into a tenth month as energy companies, including Exxon Mobil Corp, boost spending plans to take advantage of a crude price recovery.
Drillers added seven oil rigs in the week to March 3, bringing the total count up to 609, the most since October 2015, energy services firm Baker Hughes Inc said on Friday.
During the same week a year ago, there were 392 active oil rigs.
Since crude prices first topped $50 a barrel in May after recovering from 13-year lows in February 2016, drillers have added a total of 293 oil rigs in 36 of the past 40 weeks, the biggest recovery in rigs since a global oil glut crushed the market over two years starting in mid 2014.
The Baker Hughes oil rig count plunged from a record 1,609 in October 2014 to a six-year low of 316 in May 2016 as U.S. crude collapsed from over $107 a barrel in June 2014 to near $26 in February 2016.
U.S. crude futures traded around $53 a barrel on Friday, putting the contract on track to fall for a second week in three as ample U.S. crude supplies undermine efforts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers to drain a global oil glut. [O/R]
U.S. crude inventories hit record highs last week, after eight straight weeks of builds, and production topped 9 million barrels per day for a second week in a row, the most since April 2016, according to federal energy data. [EIA/S]
Analysts said they expect U.S. 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 and calendar 2018 were both fetching over $54 a barrel.
Exxon’s new Chief Executive Darren Woods told shareholders on Wednesday that the oil major is to invest $5.5 billion in short-term drilling projects in North Dakota and Texas in 2017, or around a quarter of capex, and intends increasing it in the following three years.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast the total oil and gas rig count would average 815 in 2017, 933 in 2018 and 1,044 in 2019. Most wells produce both oil and gas.
That compares with an average of 718 so far in 2017, 509 in 2016 and 978 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 52 exploration and production (E&P) companies planned to increase spending by an average of 50 percent in 2017 over 2016.
That expected spending increase in 2017 followed an estimated 48 percent decline in 2016 and a 34 percent decline in 2015, Cowen said according to the 64 E&P companies it tracks.
Reporting by Scott DiSavino; Editing by Marguerita Choy