For the second consecutive week, U.S. oil and natural gas producers have bolstered drilling activity significantly by bringing 13 rigs on in prolific shale plays throughout the country.
The move comes two weeks after the Organization of Petroleum Exporting Countries, OPEC, agreed to cut its production by 1.2 million barrels of oil equivalent per day and one week after U.S. producers add a whopping 27 rigs, bringing the already bolstered count to 623.
The overall U.S. count now sits at 637, with oil rigs climbing 12 to 510 and natural gas rigs rising by 1 to 126 as natural gas prices have rebounded more than 80% in the past 12 months from lows hit in early March.
Houston-based Baker Hughes (BHI) also said offshore rigs remained flat at 22 the past week, down 2 rigs from this time last year.
For the third consecutive week, the Permian Basin saw the biggest activity uptick, with 11 rigs added. That brings the overall number of rigs in the lucrative west Texas region to 258 -- the most in any major domestic basin.
Recent dealmaking in the Permian by Diamondback Energy (FANG - Get Report) shows U.S. oil producers have no plans to slow down activity in the prolific play, and investment banking sources see the land grab that has played out over the second half of 2016 in the region continuing over the next 12 months.
The Houston-based oil and natural gas producer said Dec. 14 it would pay $2.43 billion to pick up acreage in Texas' Permian Basin from Warburg Pincus-backed Brigham Resources. The deal brings Diamondback's total leasehold interests in the Permian Basin to about 182,000 net acres.
Very few other U.S. shale basins saw additional rigs brought online this past week, with east Texas' Eagle Ford and Haynesville shales each adding 1 unit.
Following the rig count report, oil prices continued their gains Friday. West Texas Intermediate crude was up by about 1.7% to $51.80 a barrel, meanwhile global benchmark Brent Crude for February delivery was climbing by nearly 2% to about $54 per barrel shortly after 1 p.m. ET.
Oil prices were likely helped up by notes from Goldman Sachs analysts that were bullish on oil in the near term as OPEC cuts will coupled with strong demand in 2017 will assist in bring the supply-demand complex nearer to 10-year averages.
Baker Hughes' rig count is down 72 from last year's count of 709, with oil rigs down 31, gas rigs down 42 and miscellaneous rigs up 1.
Meanwhile, the Canadian rig count is up 4 rigs from last week to 234, with oil rigs down 1 to 116, gas rigs up 4 to 116, and miscellaneous rigs up 1 to 2.