U.S. energy companies this week added the most oil rigs since July 2015, extending the seven-month drilling recovery as crude prices rose to a near 17-month high.
Drillers added 21 oil rigs in the week to Dec. 9, bringing the total count up to 498, the most since January, but still below the 524 rigs seen a year ago, energy services firm Baker Hughes Inc s
aid on Friday.
Since crude prices briefly recovered from 13-year lows to around $50 a barrel in May, drillers have added a total of 182 oil rigs in 25 of the past 28 weeks, its biggest recovery since a global oil glut crushed the market over two years.
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 around $51 a barrel on Friday on optimism that non-OPEC producers meeting in Vienna over the weekend would agree to cut output to bolster the cartel's own agreement to limit production.
The Organization of the Petroleum Exporting Countries last week agreed to slash production by 1.2 million barrels per day in the first half of 2017.
With prices expected to keep rising in coming months, analysts said they expect U.S. energy firms to boost spending on drilling and pump more oil and natural gas from shale fields in coming years.
Futures for calendar 2017 were trading around $54 a barrel, while calendar 2018 was fetching near $55.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, forecast the total oil and gas rig count would average 506 in 2016, 699 in 2017 and 910 in 2018. Most wells produce both oil and gas.
That compares with an average of 978 oil and gas rigs active in 2015 and an average of 498 so far in 2016, according to Baker Hughes data.
Analysts at U.S. financial services firm Cowen & Co said in a note this week that its capital expenditure tracking showed 20 exploration and production (E&P) companies, including PDC Energy Inc, planned to increase spending by an average of 34 percent in 2017 over 2016.
That projected 2017 spending increase followed an estimated 48 percent decline in 2016 and a 35 percent decline in 2015, Cowen said according to the 64 E&P companies it tracks.
(Reporting by Scott DiSavino; Editing by Marguerita Choy)