U.S. oil rig count continues to rise

Recently, Baker Hughes said in its rig report that the number of active U.S. oil and gas rigs increased for the second week in a row to 779 in the week ended Nov. 11, the highest level since March 2020. Higher oil prices have encouraged oil companies to increase the rig count, the company said.

Among the active drilling rigs, the number of oil rigs in the United States increased by 9 to 622, the highest since March 2020; the number of active natural gas rigs remained stable at 155. However, as oil prices continue to rise, several U.S. energy companies said they plan to increase spending for a second year in a row in 2022 after cutting spending on drilling and completions in 2019 and 2020. U.S. financial services firm Cowen & Co said independent oil and gas companies it tracks will increase spending by about 40% in 2022 after spending about 4% in 2021. According to federal energy data, U.S. crude oil production is expected to increase from 11.3 million bpd in 2021 to 11.8 million bpd in 2022 and to 12.3 million bpd in 2023, matching 2019 figures.

However, some analysts pointed out that even if energy companies do increase capital spending, it is not necessarily to increase production, but to buy more expensive pipelines and other equipment, as well as rising labor costs due to soaring inflation and supply disruptions.