July 2, 2009 / 6:57 PM / 9 years ago

U.S. natgas rig count edges up 1 to 688 for week

NEW YORK, July 2 (Reuters) - The number of rigs drilling for natural gas in the United States unexpectedly rose again, the second gain in seven months, according to a report on Thursday by oil services firm Baker Hughes in Houston.

The report showed U.S. gas drilling rigs edged up 1 to 688 this week, still 851 rigs, or 55 percent, below the same week last year, when there were 1,539 gas rigs operating.

U.S. natural gas drilling rigs have been in a mostly steady decline since peaking above 1,600 in September, but two weeks ago the count rose for the first time since November 2008.

Sources said the gas rig count decline seemed to be slowing just below the 700 mark, despite still-weak natural gas prices, possibly because some prolific shale plays like Haynesville in Louisiana or Marcellus in Appalachia may still be economic.

Tighter access to credit and a 70 percent slide in natural gas prices to about $3.50 per mmBtu, after peaking above $13 last July, have forced many producers to scale back drilling operations.

But, with the natural gas drilling rig count below 700, most analysts expect to see year-on-year output declines soon, which should help tighten the overall supply-demand balance. (Reporting by Joe Silha; Editing by Walter Bagley)

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