Oil explorers boost U.S. drilling for first time since December

Drillers put rigs back to work in U.S. oil fields for the first time since December, driving down crude prices on speculation that an unprecedented retreat from the country’s shale formations is ending.

Rigs targeting oil in the U.S. rose by 12 to 640, the first increase since Dec. 5, Baker Hughes said on its website Thursday. The count in almost every major U.S. oil basin gained, with Texas’ Eagle Ford Shale adding three.

America’s oil drillers have sidelined more than half the country’s rigs since October as the world’s largest suppliers battle for market share. The crude being pumped out of shale formations has helped create a global glut that drove prices down 49 percent in the second half of 2014. Traders have watched the rig counts as they try to determine when U.S. oil production will fall.

“This is fairly solid evidence that the decline in the oil rig count has come to an end, as long as oil prices hold up,” James Williams, president of the energy consultancy WTRG Economics, said Thursday. “If anything, this is going to bring the market down a little bit. It indicates that any production decline may only last for three months.”

West Texas Intermediate for August delivery slipped 3 cents to $56.93 a barrel on the New York Mercantile Exchange on Thursday, pushing futures down 4.5 percent this week.

Despite the collapse in drilling, the U.S. pumped 9.7 million barrels a day in April, the most since 1971 in monthly data from the Energy Information Administration. Output slipped in both North Dakota, where the prolific Bakken Shale formation lies, and Texas, home to both the Eagle Ford and the Permian Basin.

Higher oil prices and a decline in drilling completion costs may spur enough new production to stave off a drop in total supply, Bloomberg Intelligence energy analysts Vincent Piazza and Syarifa Galeb said in a research note Wednesday.

Barnett Shale gains

In North Texas, the number of rigs searching for natural gas in the Barnett Shale went up again, continuing a climb that began three weeks ago, according to RigData.

On June 12, four operators were working in the 5,000-square-mile gas field. The next week, six were. Then seven. And finally nine this week.

Tarrant and Jack counties reported having three rigs each, while Clay, Palo Pinto and Stephens counties reported having one each.

During the week of March 13, the Barnett Shale rig count dropped to one and has hovered in the single digits since.

Staff writer Max B. Baker contributed to this report.

This story was originally published July 2, 2015 at 4:11 PM with the headline "Oil explorers boost U.S. drilling for first time since December."