Oil prices rose after U.S. oil and gas producers brought three drilling rigs online in the past week.
U.S. oil producers took four rigs offline for a total of 796, according to Baker Hughes (BHGE) . Gas rigs, meanwhile, climbed by seven to 188, boosting the overall total U.S. rig count to 984.
The U.S. rig count was up 216 rigs from last year's count of 768. There were 179 more oil rigs than there were during the same period last year and gas rigs have increased by 37 year over year.
U.S. benchmark West Texas Intermediate crude oil contracts for April delivery rose 2.8% to $61.81 a barrel, while Brent crude, the global benchmark, climbed 2.4% to $65.16.
Earlier this week, oil prices declined after data from the U.S. Energy Information Administration revealed U.S. crude production surged last month.
Domestic crude production in February rose by 230,000 barrels per day to an average of 10.3 million barrels per day.
The EIA forecast that U.S. crude oil production will reach a new record this year, averaging 10.7 million barrels per day, "which would mark the highest annual average U.S. crude oil production level, surpassing the previous record of 9.6 billion barrels per day set in 1970."
Paris-based International Energy Agency, which advises governments and companies on industries trends, said the U.S. will become the world's largest oil producer by 2023. U.S. crude production is expected to reach 12.1 million barrels per day in 2023.
"We think that in the next five years to come, the United States will put its stamp on the global oil market developments," IEA Executive Director Fatih Birol told CNBC at the CERAWeek energy conference in Houston.
Exxon Mobil Corp. (XOM) plans to triple production in the oil-rich Permian Basin in West Texas by 2025, the company said Wednesday.
"We anticipate a fivefold increase in the Permian production and 25 start-ups worldwide, adding net volumes of 1 million oil-equivalent barrels," Chief Executive Darren Woods said during an analyst meeting.
Jefferies analyst Jason Gammel noted ahead of the analyst meeting that Exxon has "one of the most aggressive shale/tight oil drilling programs in the industry, currently operating 26 rigs in the Permian/Bakken with intent to reach 36 rigs by [year-end 2018]."
More specifically, 30 rigs will run in the Permian this year, with six in the Bakken Shale Formation, which is in Eastern Montana and Western North Dakota, said Woods.
The increased focus on U.S. shale is part of Exxon's goal to double annual earnings by 2025. But investors were not pleased with the company's steeper-than-expected capital expenditure guidance, sending the stock to its lowest level in more than two years. Exxon expects to spend $24 billion this year, $28 billion in 2019, and then an "average somewhere above $30 billion a year" through 2025, Woods said.
"As a result, XOM expects operating cash flow and net income to increase from $30 billion and $15.3 billion in 2017 to $55 billion and $35 billion in 2025, respectively, assuming $60 per barrel Brent," said Credit Suisse analysts, including William Featherston, in a March 7 research note.
Exxon shares rose 0.3% to $74.35 on Friday.
Rival Chevron Corp. (CVX) also is accelerating its production, particularly in the Permian.
"We're advancing development of our unconventional resources, particularly in the U.S. Permian Basin, where we have a leading position," Jay Johnson, Chevron's executive vice president of upstream, said in a statement. "We're seeing reserves grow, costs shrink, efficiencies expand and production rise."
Chevron increased its Permian resources by 20% to more than 11 billion barrels and expanded its unconventional position by 200,000 acres to 1.7 million acres, Johnson said.
"We now expect Permian unconventional production to reach around 500,000 barrels a day by the end of 2020 and 650,000 barrels a day by the end of 2022," Johnson said during an analyst meeting Tuesday. "This is based on running 20 company-operated and 9 non-operated net rigs by the end of this year."
Shares of Chevron rose 2.9% to $116.67.
According to Baker Hughes, two rigs came online in the Permian over the past week, bringing the total rig count in the prolific basin to 436.