October 7, 2011 / 5:35 PM / 8 years ago

UPDATE 1-US natgas rig count at 9-1/2-mth high-Baker Hughes

* Gas-drilling rig count hits highest since mid-December
    * Horizontal rigs climb to a record high 1,148 this week
 (Adds price reaction, details, background)
    NEW YORK, Oct 7 (Reuters) - The number of rigs drilling for
natural gas in the United States climbed by 12 this week to a
9-1/2-month high of 935, data from oil services firm Baker
Hughes showed on Friday.
    The gas-directed rig count is at its highest since Dec. 17,
when the total stood at 941. The count is down 6 percent from
its 2010 peak of 992, its highest since February 2009, when
1,018 rigs were drilling for gas.
    Horizontal rigs -- the type most often used to extract oil
or gas from shale -- gained 13 to a record high 1,148,
eclipsing the previous record of 1,140 hit two weeks ago. (Rig
graphic: r.reuters.com/dyb62s )
    Front-month U.S. natural gas futures NGc1, which were
down 11 cents, 3 percent, at $3.488 per million British thermal
units just before the release of the data at 1 p.m. EDT (1700
GMT), slipped another 1.3 cents to a new 11-month low of $3.475
shortly after the report.
    Relatively low gas prices have prompted some companies to
shift spending away from gas to more-profitable liquids or
oil-related ventures, but the changes have yet to be reflected
in industry data, which still show production at record
levels.
    U.S. Energy Information Administration data last week
showed gross natural gas production in July in the lower 48
U.S. states climbed to another record high of 69.5 billion
cubic feet per day. [ID:nS1E78S110]
    Record heat this summer triggered plenty of power demand,
but traders said high gas production easily offset the surge in
cooling needs and several storm-related supply cuts.
    The gas rig count of 935 remains well above the 800 level
some analysts say is needed to cut production significantly and
tighten overall supplies.
    Most analysts expect no major slowdown in domestic gas
output until next year.
    The gas rig count is nearly 42 percent off its record peak
of 1,606 from September 2008, and 36 rigs, or 4 percent, below
the same week last year.
    Rising output from shale gas has been the primary driver of
increased gas production in the last few years, and most
traders agree it will be difficult to tighten the loose gas
market unless horizontal gas drilling slows sharply.
    Without serious production cuts or a stronger economic
recovery to boost industrial demand, which accounts for about
30 percent of gas consumption, few traders expect much upside
in gas prices in the near term.
 (Reporting by Joe Silha; Editing by David Gregorio)
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below