U.S. operators extend revival as oil trades close to 17-month high
Oil explorers added rigs for the eighth straight week, extending a ramp-up of activity in the U.S. shale patch as costs hover near $53/bbl.
Rigs targeting crude in the U.S. rose by 13 to 523 this week, Baker Hughes said friday. Drillers have added 207 rigs since the count hit a seven-year low on could 27.
Most of the recovery in drilling has been in the prolific permian basin, that has been a hotbed for acquisitions this year. Rig gains can continue to be primarily in this region till oil costs are "substantially higher," said robert Christensen, an analyst at Drexel Hamilton LLC in new york. however don’t expect a surge.
"It’s the only place you really will build any money," he said. "It’s going to be a very rational progression."
West texas Intermediate crude touched $54.51 on Dec. 12 and has hovered near $53 when the Organization of petroleum exporting Countries and different major exporters agreed to cut provides to ease a global glut. The deal could make room for additional U.S. shale growth, IHS Markit’s Daniel Yergin said earlier this month.
Drillers added four oil rigs within the permian, raising the count to 262.
The U.S. may add 300,000 to 500,000 bpd by the end of 2017 with oil costs around $50 to $55, according to Yergin. however mega-projects are much slower to come back.