(Reuters) - The U.S. oil drilling rig count rose for the fourth week in a row and ended the month sharply higher as producers plan to boost output as they reap profits from crude trading near three-year highs.
Drillers added five oil rigs in the week to April 27, bringing the total count to 825, the highest level since March 2015, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.
For the month, drillers added 28 oil rigs in April after cutting two rigs in March. So far this year, the rig count has risen by 78.
The U.S. rig count, an early indicator of future output, is much higher than a year ago when 697 rigs were active. Energy companies have been steadily increasing spending on drilling and completions since mid-2016 when crude prices began recovering from a two-year crash.
U.S. producers are accelerating shale drilling mostly in the Permian Basin of west Texas and New Mexico, the largest U.S. oilfield, lifting the nation’s output this year to more than 10 million barrels per day, a new record.
U.S. crude futures traded near $68 a barrel this week, close to their highest since November 2014. So far this year, futures have averaged $64, up sharply from averages of $50.85 in 2017 and $43.47 in 2016.
Looking ahead, futures were trading around $67 for the balance of 2018 and $62 for calendar 2019.
In anticipation of higher prices in 2018 versus 2017, U.S. financial services firm Cowen & Co said 58 of the roughly 65 exploration and production (E&P) companies they track have already provided guidance indicating an 11 percent increase this year in planned capital spending.
Cowen said those E&Ps that have reported capital plans for 2018 expected to spend a total of $80.5 billion in 2018, up from an estimated $72.4 billion in 2017.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week slightly increased their forecast for the average total oil and natural gas rig count to 1,015 in 2018 and 1,130 in 2019. That compares with last week’s forecast of 1,014 in 2018 and 1,129 in 2019.
So far this year, the total number of oil and gas rigs active in the United States has averaged 977, up sharply from an average of 876 rigs in 2017 and 509 in 2016, and a shade below 978 in 2015. Most rigs produce both oil and gas.
ConocoPhillips said on Thursday its U.S. shale operations, which made money in the first quarter after losing cash for more than a year, were now profitable at oil prices under $45 per barrel, more than $20 below current levels.
The world’s largest independent oil and gas exploration and production company kept its 2018 capital budget at $5.5 billion, but raised its production outlook slightly.
U.S. oil and gas producer Hess Corp this week said that net production fell in the first quarter. While production had been expected to be lower in the U.S. Gulf of Mexico due to a shutdown of the Enchilada platform following a fire, the company exceeded its forecast as output in North Dakota’s Bakken shale increased 12 percent.
Oilfield services provider Halliburton Co reported a 34 percent jump in first-quarter revenue as North American companies boosted oil and gas production, but warned of ongoing tightness in the hydraulic fracturing market.
Reporting by Scott DiSavino; Editing by Marguerita Choy