U.S. energy firms added 5 oil rigs this week after putting 21 rigs into service last week, the most in over a year, despite a collapse in U.S. crude prices from recent highs in June, data showed on Friday.
That was a sign some drillers followed through on plans to add rigs announced in May and June when U.S. crude futures were averaging $60 a barrel. U.S. crude futures so far this week however have traded around $48.
The rig count gain this week was the fourth increase in the past 34 weeks, bringing the total rig count up to 664, the highest early May, oil services company Baker Hughes Inc said in its closely followed report.
U.S. crude futures this week were on track for a fifth down week in a row, their longest losing streak since January.
Analysts said U.S. crude futures were trading at their lowest level since March on continuing lackluster global demand growth and lingering oversupply concerns.
The Organization of the Petroleum Exporting Countries (OPEC) was still flooding the international markets with oil while United States production remains high despite a small decline in weekly output seen last week.
U.S. crude production dipped to 9.4 million barrels per day last week after averaging around 9.6 million barrels per day for the prior nine weeks in a row, its highest level since the early 1970s, according to government data.
Production should continue to decline in the third quarter from the prior quarter based on rig counts, Goldman Sachs said in a report.
The recent slight reduction in U.S. production was an early sign that the spending cuts energy firms started making late last year have started to bite.
In response to a near 60 percent price collapse from $107 in June 2014 to under $44 in January, U.S. drillers eliminated thousands of jobs and idled 60 percent of the record high 1,609 oil rigs that were active in October.