U.S. energy firms added oil and natural gas rigs for a record 20th month in a row, with oil rigs alone jumping seven this week after the United States urged producers to boost output as the world seeks to wean themselves off Russian energy after Moscow's invasion of Ukraine.
The oil and gas rig count, an early indicator of future output, rose seven to 670 in the week to March 25, its highest since March 2020, energy services firm Baker Hughes Co. said in its closely followed report on Friday.
U.S. Energy Secretary Jennifer Granholm said on Tuesday the Biden administration believes producers will boost U.S. oil supply by the end of the year, after she urged them to raise output quickly in the wake of the Russian invasion on Feb. 24.
Baker Hughes said the total count was up 253 rigs, or 61%, over this time last year.
U.S. oil rigs rose seven to 531 this week, their highest since April 2020, while gas rigs were unchanged at 137.
For the month, the total oil and gas rig count rose by 20 in its record 20th monthly increase, while for the quarter, it rose 84, its sixth quarterly hike in a row.
For the month, the oil rig count rose by nine, its lowest monthly increase since September 2020. That was its 19th monthly rise. For the quarter, it rose by 51, its sixth quarterly hike in a row, but was down from a 59 rig increase in the fourth quarter.
U.S. crude futures were trading around $113 per barrel on Friday, putting the contract on track to climb 8% this week.
Even though the U.S. oil rig count has climbed for a 19 months in a row, the increases have been small and have slowed down in March. Many companies are focusing on returning money to investors rather than boosting output, and are facing physical limitations, including a very tight labor market.
U.S. crude production was on track to rise from 11.2 million barrels per day (bpd) in 2021 to 12.0 million bpd in 2022 and 13.0 million bpd in 2023, according to federal energy data. That compares with a record 12.3 million bpd in 2019.
© 2023 Thomson/Reuters. All rights reserved.