U.S. energy firms this week added oil and natural gas rigs for a fourth week and second month in a row as relatively high oil prices encourage firms to drill more.
The oil and gas rig count, an early indicator of future output, rose two to 784 in the shortened week to Nov. 23, its highest since March 2020, energy services firm Baker Hughes Co. said in its closely followed report.
Baker Hughes issued the weekly rig report two days ahead of schedule due to the U.S. Thanksgiving Day holiday.
U.S. oil rigs rose four to 627 this week, their highest since March 2020, while gas rigs fell two to 155.
For the month, drillers added 16 rigs, the most since June, putting the total count up for a second month in a row for the first time.
In November, drillers added 17 oil rigs, and cut one gas rig.
With oil prices up about 3% so far this year after soaring 55% in 2021—and pressure from the government to produce more—several energy firms have said they plan to boost spending for a second year in a row in 2022 after cutting drilling and completion expenditures in 2019 and 2020.
Even though the rig count increased during most months over the past two years, weekly increases have mostly been in the low single digits so far in 2022, keeping oil production below record levels seen before the pandemic as many companies focus more on returning money to investors and paying down debt rather than boosting output.
The government forecasts U.S. crude production to rise from 11.3 million bbl/d in 2021 to 11.8 million bbl/d in 2022 and 12.3 million bbl/d in 2023, which matches the record high in 2019.