The number of rigs drilling for oil in the United States rose again this week, extending its second-best streak of no cuts into a 17th straight week, with analysts expecting more additions as crude prices hold over $50 a barrel.
Drillers added 11 oil rigs in the week to Oct. 21, bringing the total count up to 443, the most since February, but still below the 594 rigs seen a year ago, according to energy services firm Baker Hughes Inc on Friday.
That 17-week streak of not cutting rigs matched a stretch in 2010, making it the second-longest run since 1987, following 19 weeks in 2011.
The Baker Hughes oil rig count plunged from a record of 1,609 in October 2014 to a six-year low of 316 in May after crude prices collapsed from over $107 a barrel in June 2014 to near $26 in February 2016 due to a global oil glut.
But after U.S. crude briefly climbed over $50 a barrel in May and June, drillers have added 127 oil rigs. Analysts said prices over $50 were high enough to prompt energy firms to return to the well pad.
U.S. crude futures continued to trade over $50 a barrel for much of this week, spurred by continued talk of an OPEC production cut and a surprisingly large drop in U.S. inventories for the sixth week out of seven.
That put the front-month on track to rise for a fifth week in a row, its longest winning streak since March, gaining about 18 percent during that time.
With oil prices expected to continue rising in 2017 and 2018 amid a forecast tightening of the supply-demand balance, analysts said energy firms will boost spending on drilling.
Futures were trading above $53 a barrel for calendar 2017 and around $55 for calendar 2018.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast total oil and natural gas rigs would average 500 in 2016, 666 in 2017 and 876 in 2018.
That compares with an average of 978 oil and gas rigs active in 2015 and 484 so far this year, according to Baker Hughes data.
Source: Reuters (Reporting by Scott DiSavino; Editing by Meredith Mazzilli)