U.S. drillers add oil and gas rigs for 11th week in a row -Baker Hughes

By Scott DiSavino

Feb 5 (Reuters) - U.S. drillers this week added oil and natural gas rigs for an 11th week in a row for the first time since June 2017 as crude prices hit pre-pandemic highs.

The U.S. oil and gas rig count, an early indicator of future output, rose by eight to 392 in the week to Feb. 5, the highest since May, according to data on Friday from energy services firm Baker Hughes Co BKR.N. RIG-OL-USA-BHI, RIG-OL-USA-BHI, RIG-GS-USA-BHI

Despite rising for six months in a row, that count is still 398 rigs, or 50%, below this time last year. The total count, however, has soared since hitting a record low of 244 in August, according to Baker Hughes data going back to 1940.

U.S. oil rigs rose four to 299 this week, also their highest since May, while gas rigs rose four to 92, their highest since April, according to Baker Hughes data.

Coronavirus travel restrictions last year crushed oil demand and prices, but U.S. crude CLc1 futures climbed over $57 a barrel this week, their highest since January 2020. O/R

The pace of recovery in output in the world's top producer, however, is slow. The government this week projected U.S. crude output will not to top its 2019 record of 12.25 million barrels per day until 2023. Production in 2020 tumbled 6.4% to 11.47 million bpd. nL1N2K92QF

Looking forward, U.S. crude futures were only trading around $55 a barrel for the balance of 2021 CLBALst and $51 for calendar 2022 CLYstc1, which could prompt some producers to reduce activity in the future.

Most energy firms plan to continue cutting spending for a third year in a row in 2021 as they keep focusing on improving earnings rather than increasing output.

U.S. financial services firm Cowen & Co said the 45 independent exploration and production (E&P) companies it tracks plan to cut spending by about 6% in 2021 versus 2020. That follows capex reductions of roughly 48% in 2020 and 12% in 2019. nL1N2CO27N nL1N2CO16Y nL1N2B23GQ

(Reporting by Scott DiSavino
Editing by Marguerita Choy)

((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))

For Refinitiv, formerly called Thomson Reuters Analytics, see: cpurl://apps.cp./cms/?pageid=usa-gas

For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44
U.S. natural gas inventories: http://tmsnrt.rs/2ewaRk2
For a list of all Baker Hughes rig counts around the world, see: RIG-NOM-BHI
For U.S. oil rigs, see: RIG-OL-USA-BHI
For U.S. gas rigs, see: RIG-GS-USA-BHI