U.S. oil drillers increased rigs this week for a 21th week in the last 24, as energy firms follow through on plans to add rigs made months ago when crude was still trading over the key $50 a barrel level analysts said should lead to more drilling.
Drillers added two oil rigs in the week to Nov. 11, bringing the total count up to 452, the most since February, but still below the 574 rigs seen a year ago, energy services firm
Baker Hughes Inc said on Friday.
Since crude topped $50 a barrel in May, June and October, drillers have added 136 oil rigs, its biggest recovery in over two years since prices collapsed due to a global oil glut.
The Baker Hughes oil rig count plunged from a record 1,609 in October 2014 to a six-year low of 316 in May as U.S. crude collapsed from over $107 a barrel in June 2014 to near $26 in February 2016.
U.S. crude futures were trading above $43 a barrel on Friday, on track to fall for a third week in a row after OPEC said its output in October reached a record high, casting doubt on whether its plans to limit production would ease persistent oversupply in the market.
But with oil prices still expected to rise in 2017 and 2018 with a projected tightening of the supply-demand balance, analysts continued to expect energy firms to follow through on previously announced plans to boost spending on new drilling in coming years.
Futures were trading near $47 a barrel for calendar 2017 and near $50 for calendar 2018.
Analysts at U.S. financial services firm Cowen & Co said this week in a note that its capital expenditure tracking showed 17 exploration and production (E&P) companies, including ConocoPhillips and Concho Resources Inc, planned to increase spending by an average of 33 percent in 2017 over 2016.
Cowen said that forecast 2017 increase followed an estimated 48 percent decline in 2016 and a 35 percent decline in 2015 for the 65 E&P companies it tracks.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast the total oil and natural gas rig count would average 504 in 2016, 685 in 2017 and 896 in 2018. Most wells produce both oil and gas.
That compares with an average of 978 oil and gas rigs active in 2015, according to Baker Hughes data.
(Reporting by Scott DiSavino; Editing by Marguerita Choy)