Oilfield services giant Baker Hughes (BHI) reported Friday that U.S. oil and natural gas producers added 20 rigs in the past week, bringing the overall count to to 588, as oil rigs soared by 19 and gas rigs climbed by one.
Houston-based Baker Hughes, soon to be tied up with General Electric's (GE) oil and natural gas unit in a deal that is expected to create the world's second-largest oilfield services provider behind Schlumberger (SLB) , said the U.S. oil rig count now stands at 471, while the gas rig count stands at 116.
Not surprisingly, west Texas' lucrative Permian Basin saw the greatest ramp in activity with 11 oil rigs added during the week.
The U.S. offshore rig count also is up to 23, a two-rig climb from last week, and a seven-rig decline year over year.
This is the third consecutive oil rig uptick in the U.S. despite the overall rig count falling in the previous frame on reduced natural gas and miscellaneous rigs.
Baker Hughes rig count is seen as an important industry barometer for drilling activity across the U.S. and North America. The company is in the early stages of its $7.4 billion merger with GE's oil and gas unit, but as before with its failed tie-up with Halliburton (HAL) industry sources are not concerned over the future of the rig report as these people said the company understands how important it is to investors.
The uptick comes as oil traders anxiously await a Nov. 30 meeting of the Organization of Petroleum Exporting Countries, or OPEC. The so-called oil cartel is expected to come to a formal agreement on a production cut that will likely move the U.S. and global oil markets.
Future markets for both U.S. benchmark West Texas Intermediate crude oil contracts and global benchmark Brent crude contracts continued to be volatile this week.
If OPEC should hammer out a production cap agreement at months-end, Stifel Nicolaus analyst Michael Scialla said he feels U.S. shale producers will be the greatest beneficiaries of the ensuing higher oil price environment.
Scialla further feels these operators will be capable of driving U.S. oil production to an all-time high within the next two years if OPEC should freeze output, though he admits the organization faces significant challenges and widespread skepticism.
Baker Hughes' rig data shows that U.S. producers are already making up for lost ground, with the count down by 169 from last year's count of 757, with oil rigs down 93, gas rigs down 77, and miscellaneous rigs up one.
Meanwhile, the Canadian rig count climbed by eight this week to 184. Canadian oil rigs were up by 11 week over week to 100, while the number of gas rigs fell by three to 84.