Saturday, February 27, 2010

Rig Count Up 28

HOUSTON (Dow Jones)--The number of rigs drilling for oil and natural gas climbed this week as producers ramped up activity to take advantage of higher commodity prices.
The number of oil and gas rigs climbed to 1,373, up 28 from the previous week, according to data from oil-field services company Baker Hughes Inc. (BHI). The number of gas rigs was 905, an increase of 12 rigs from last week, while the oil rig count was 456, an increase of 16 rigs. The number of miscellaneous rigs was unchanged at 12 rigs.
The number of gas rigs in use peaked at 1,606 in September 2008. Producers scaled back natural-gas drilling sharply last year in response to low prices amid a flood of supply from shale-rock formations. But the rig count has steadily climbed over the last several weeks, as producers lock in prices on future output and frigid winter weather boosts gas demand and prices.
In September, natural gas prices reached their lowest level in more than seven years, but prices have nearly doubled from that low. Recent cold weather has spurred significant demand for gas heating, putting a dent in inventories. Total gas in U.S. storage for the week ended Feb. 19 was 1.853 trillion cubic feet--about 3% below last year's level and 0.7% above the five-year average.
Natural gas for April delivery on the New York Mercantile Exchange recently traded less than a penny lower at $4.762 a million British thermal units.
-By Jason Womack, Dow Jones Newswires; 713-547-9201;

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