USA rig count jumps up again with 15 more Texas rigs

There was an increase in the number of oil rigs to 371 from 357 previously while the number of natural gas rigs again declined marginally to 88 from 89 previously.

The biggest gains were in Texas, where 15 new rigs were brought on line, with the Permian basin specifically seeing eight new rigs put into action.

USA natural gas rigs were down one to 88 from 89 last week and miscellaneous rigs were up for the first time in months, gaining two rigs to sit at three total. The number of rigs operating in the Gulf of Mexico also fell and are down by three this week to 18. It’s “quite possible that we continue to see a few more weeks of follow-through, but if oil prices stay in the low $40s, the rig count’s upward momentum will likely be halted”.

Amid steep cost reductions and higher oil prices versus the start of the year, producers are betting that a rebound is underway.

“We expect to see a continued modest uptick in the USA rig count during the second half of the year”.

Analysts at Simmons & Co. and energy specialists at US investment bank Piper Jaffray, forecast that the total oil and natural rig count would average 487 in 2016, 675 in 2017 and 953 in 2018.

“Higher and more stable crude oil prices are contributing to increased drilling in the United States, which may slow the pace of production declines”, the EIA said.

“The oil rig count popping 14 rigs this week is likely due to recent oil prices that were closer to $50”, he said in an e-mail. In 2015, production averaged 9.4 million bpd.

This week, the world’s two largest oilfield services companies said they believed the oil market may have bottomed.