U.S. Rig Activity Climbs As Oil Prices Rise

U.S. energy firms added oil and natural gas rigs for a fourth week in a row for the first time since May, spurred by higher oil prices. Oil prices are up 48% so far this year, several energy firms have said they plan to raise spending, which however, remains small as most firms continue to focus on boosting cash flow, reducing debt and increasing shareholder returns.

Thus higher oil prices translate to better margins, which are especially important due to the cost of U.S. shale oil, and that is reflected in the increase in the number of operating oil and gas rigs. According to Baker Hughes, the oil and gas rig count, an early indicator of future output, rose by seven to 491 in the weekly period ending on July 23rd. U.S. oil rigs rose seven to 387 this week, their highest since April 2020, while gas rigs were unchanged at 104.

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Source: Stockhead.com.au