Oil saga: Refinery workers walk inside the Lyondell Basell oil refinery in Houston, Texas. Shale drillers have added 100 rigs since Seotember in the US. – Reuters
HOUSTON: Oil explorers closed out 2016 by adding drilling rigs for a ninth-straight week, capping the biggest quarterly increase in almost three years as they look ahead to a new year of steady growth.
Rigs targeting crude in the US rose by 2 to 525, according to Baker Hughes Inc data reported Friday. After two years of declines, rigs hit bottom in May at 316. Shale drillers have added 100 rigs since September, the most since the boom times of first-quarter 2014. None of the four largest US basins dropped any oil rigs this week.
“We’re really getting the gains where we’d anticipate getting them, in the bigger plays,” James Williams, president of WTRG Economics in London, Arkansas, said Friday in a phone interview. “What you’re going to see is kind of the same trend that we’ve seen for the last couple of months.”
Roiled by a year that began with crude at a 12-year low and ended with a surprise Organisation of the Petroleum Producing Countries (Opec) agreement boosting prices, US producers including Continental Resources Inc and Pioneer Natural Resources Co are promising not to overreact – or overspend. With president-elect Donald Trump promising to ease industry regulations and analysts predicting better earnings for 2017, shale drillers are gearing up for growth.
“There’s a real concern by industry that we could be in for another one of these price adjustments, if we get carried away with development,” Harold Hamm, chief executive officer of Oklahoma-based Continental, said in an interview in New York. “They’re going to be disciplined going forward.”
Natural gas rigs rose by 3 to 132 this week, bringing the total for oil and gas up by 5 to 658.
The oil industry’s worst financial crisis in a generation has dragged on for 2½ years, with crude prices tumbling more than 75% from their peak in 2014 and hitting a low of US$26.21 in February. Explorers and contractors responded by slashing more than 350,000 jobs worldwide.
Oil has traded near or above US$50 a barrel since Opec agreed Nov 30 to cut output for the first time in eight years. Non-Opec producers including Russia will also trim supply. – Bloomberg