U.S. energy firms [last week] added oil and natural gas rigs for a fifth time in six weeks as offshore oil units in the Gulf of Mexico slowly started to return after Hurricane Ida slammed into the coast.
[Last week], four offshore oil rigs returned in Louisiana, energy services firm Baker Hughes Co said in its closely followed report on Friday.
The previous week, all 14 offshore rigs operating in the Gulf of Mexico shut due to Ida. All of them were seeking oil and located off Louisiana.
Overall, the oil and gas rig count has increased for 13 months in a row through August as rising oil prices have prompted drillers to return to the wellpad.
The oil and gas rig count, an early indicator of future output, rose 6 to 503 in the week to Sept. 10, Baker Hughes said.
That puts the total rig count was up 249 rigs, or 98%, over this time last year.
U.S. oil rigs rose 7 to 401 this week, while gas rigs fell 1 to 101.
In addition to the offshore Gulf Coast rigs, drillers also added 4 oil rigs in the Permian basin in Texas and New Mexico, the nation’s biggest shale oil formation.
U.S. crude futures were trading around $70 a barrel on Friday, supported by growing signs of supply tightness in the United States as a result of Hurricane Ida.
With oil prices up about 43% so far this year, some energy firms said they plan to boost spending in 2021 after cutting drilling and completion expenditures over the past two years.
That spending increase, however, remains small as most firms continue to focus on boosting cash flow, reducing debt and increasing shareholder returns rather than adding output.
In fact, many analysts do not expect that extra spending to boost output at all. Instead, they think it will only replace natural declines in well production.
U.S. oil production is expected to slide from 11.3 million barrels per day (bpd) in 2020 to 11.1 million bpd in 2021 before rising to 11.7 million bpd in 2022, according to government projections. That compares with the all-time annual high of 12.3 million bpd in 2019.