U.S. energy firms this week added oil rigs for the first time in the last five weeks, data showed on Friday, despite continued weak crude prices.
Drillers added 17 oil rigs in the week ended Dec. 18, bringing the total rig count up to 541, oil services company Baker Hughes Inc s
aid in its closely followed report.
That is about a third of the 1,536 oil rigs operating in same week a year ago. Since the end of the summer, drillers have cut 151 oil rigs.
The additions this week showed that at least some drillers were willing to start drilling again even with U.S. oil prices trading below $40 a barrel in hopes of higher prices in the future.
U.S. crude futures fell as low as $34.39 a barrel on Friday, its cheapest price since February 2009, as bearish sentiment driven by oversupply rattled the market and was set to lead prices to a third straight weekly drop, the longest streak in four months.
Energy traders noted the rate of weekly oil rig reductions since the start of September, about 10 on average, was much lower than the 18 rigs cut on average since the rig count peaked at 1,609 in October 2014, due in part to expectations of slightly higher prices in the future.
U.S. crude futures for next year were trading around $40 a barrel, down from $42 last week, according to the full year 2016 calendar strip on the New York Mercantile Exchange.
Higher prices encourage drillers to add rigs. The most recent time crude prices were much higher than now was in May and June, when U.S. futures averaged $60 a barrel.
In response to those higher prices, drillers added 47 rigs over the summer.
The rig count is an indicator traders look at to predict whether production will rise or fall in future months.
U.S. oil production held at 9.4 million barrels per day (bpd) in September, the same as August, according to the latest U.S. Energy Information
Administration (EIA) 914 production report.
(Reporting by Scott DiSavino)