(Reuters) - U.S. oil drillers increased rigs this week for a 20th week in the last 23, as energy firms follow through on plans to add rigs made months ago when crude was still trading over the key $50 a barrel level analysts said should lead to more drilling.
Drillers added nine oil rigs in the week to Nov. 4, bringing the total count up to 450, the most since February, but still below the 572 rigs seen a year ago, energy services firm Baker Hughes Inc said on Friday.
Since crude topped $50 a barrel in May, June and October, drillers have added 134 oil rigs, its biggest recovery in over two years since prices collapsed due to a global oil glut.
Eighty-one rigs or about two-thirds of the rigs added since May were in the Permian basin in west Texas and eastern New Mexico, bringing the total there up to 218, the most since November 2015.
The Baker Hughes oil rig count plunged from a record 1,609 in October 2014 to a six-year low of 316 in May as U.S. crude collapsed from over $107 a barrel in June 2014 to near $26 in February 2016.
U.S. crude futures were trading around $44 a barrel on Friday, on track to fall for a second week in a row on doubts OPEC members would cut production, with a loss of around 10 percent so far this week, its biggest decline since January. [O/R]
But with oil prices still expected to rise in 2017 and 2018 with a projected tightening of the supply-demand balance, analysts forecast energy firms will follow through on plans to boost spending on new drilling in coming years.
Futures were trading near $47 a barrel for calendar 2017 and near $50 for calendar 2018.
Analysts at U.S. financial services firm Cowen & Co said this week in a note that its capital expenditure tracking showed 12 exploration and production (E&P) companies, including WPX Energy Inc and Chesapeake Energy Corp, planned to increase spending by an average of 36 percent in 2017 over 2016.
Cowen said that forecast 2017 increase followed an estimated 47 percent decline in 2016 spending below 2015 levels for the 65 E&P companies it tracks.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast the total oil and natural gas rig count would average 502 in 2016, 677 in 2017 and 887 in 2018. Most wells produce both oil and gas.
That compares with an average of 978 oil and gas rigs active in 2015, according to Baker Hughes data.
Reporting by Scott DiSavino; Editing by Marguerita Choy