Baku. 29 August. REPORT.AZ/ The number of U.S. oil drilling rigs were unchanged this week after eight weeks of consecutive rises, according to a closely followed report on Friday, although traders and analysts expect the rig count to keep rising given the recovery in crude prices.
The rig count remained steady at 406 in the week to August 26, compared with 675 a year ago, Report informs, energy services firm Baker Hughes Inc said.
Before this week, the rig count rose by 76 since the week ended July 1, the most in a row since April 2014, after crude prices hit the key $50-a-barrel mark that made a return to the well pad viable.
"Rigs are going to continue to climb," said John Kilduff, partner at New York energy hedge fund Again Capital. "We are in a price environment where there are an increasing number of fields that are profitable, and you have a lot of companies that are on the edge and need to generate cash to service their debt. Even if the wells are marginally profitable, they are going to be put into service."
On Friday, U.S. crude hovered near $47 a barrel, versus its 2016 peak of $51.67 in June that spurred a return to the well pad after prices hit a 12-year low of $26.05 in February.
Crude futures have risen more than $8 a barrel, or about 20 percent, over the past three weeks on speculation that Saudi Arabia and other key members of the Organization of the Petroleum Exporting Countries will agree next month to a production freeze deal with non-OPEC members led by Russia.
The rig count is one of several indicators of future oil and gas production. Other indicators include drillers ability to get more out of each well and the completion of drilled but uncompleted wells or DUCs.
Analytical group of Report believes oil prices will not change sharply before the OPEC summit in Algeria and prices will remain at 45-55 USD/barrel range.