U.S. energy companies kept the oil rig count unchanged this week, Baker Hughes, a GE company, said Dec. 22, even though crude prices hovered near their highest level since the summer of 2015.
The rig count, an early indicator of future output, held at 747 in the week to Dec. 22, still much higher than a year ago when only 523 rigs were active after energy companies boosted spending plans for 2017 as crude started recovering from a two-year price crash.
The increase in U.S. drilling lasted 14 months before stalling in August, September and October as some producers trimmed their 2017 spending plans after prices turned softer over the summer. Energy firms started adding rigs again in November as crude prices rose.
So far in 2017, U.S. crude futures have averaged about $51 per barrel, easily topping last year’s $43.47 average. This week, futures traded at about $58 per barrel, putting them close to their highest since June 2015.
Looking ahead, futures were trading at $58 for the balance of 2018 and $55 for calendar 2019.
In anticipation of higher prices in coming years, U.S. financial services firm Cowen & Co. said 21 of the roughly 65 E&Ps they track have already provided capex guidance for 2018 indicating a 13% increase in planned spending over 2017.
Cowen said the E&Ps it tracks said they would spend about $66.1 billion on drilling and completions in the lower 48 U.S. states in 2017, about 53% over what they planned to spend in 2016.
