Oil rig count jumps for 7th straight week

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REUTERS/ Vivek Prakash

The US oil rig count rose by 12 to 510 this week, according to oilfield-services giant Baker Hughes.

The count of rigs plunged with oil prices from late 2014, representing one of the best anecdotes of how the downturn was impacting US shale drillers. However, a recent rebound has lifted the tally nearly back to where it was at the start of this year.

One gas rig was brought online this week, taking the total to 126. One miscellaneous rig remained, and so the combined tally increased by 13 to 637.

“We expect activity levels to rise throughout 2017 as E&Ps [exploration and production companies] seek to grow production into an improving commodity price environment,” said Kurt Hallead, co-head of global energy research at RBC Capital Markets, in a note on Friday.

“Given our commodity price outlook (average of US$56/$63 WTI in 2017/18), we think oilfield services stocks are still in the early innings of a cyclical recovery, although the recovery is likely to remain choppy in the near term.”

A revival of robust US shale-oil production could undermine efforts by OPEC members to lower their output next year. Last weekend, the group of energy producers agreed with non-members, for the first time since 2001, to cut production levels by 558,000 barrels per day – around 0.6% of global supply.

Here’s the latest chart of the oil rig count:

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Andy Kiersz/Business Insider