Fri Feb 26, 2010 8:15pm GMT
NEW YORK, Feb 26 (Reuters) - The number of rigs drilling for natural gas in the United States climbed by 12 this week to near a one-year high of 905, according to a report on Friday by oil services firm Baker Hughes in Houston.
It was the ninth straight weekly gain and puts the gas rig count at its highest level since March 6, 2009, when there were 916 gas rigs operating.
The U.S. natural gas drilling rig count has rebounded 36 percent since bottoming at 665 on July 17, its lowest level since May 3, 2002, when there were 640 active gas rigs.
But the rig count is still well off its recent peak above 1,600 in September 2008, and stands at 65 rigs, or 7 percent, below the same week last year.
Many gas producers had scaled back drilling operations earlier last year with credit tight and natural gas cash prices sinking during summer to about $2 per million British thermal units (mmBtu), a 7-1/2 year low and down some 85 percent from July 2008 highs above $13.
But cash gas prices are still more than double their late summer lows, trading in the $4.80s this week, high enough to encourage more onshore drilling, particularly in some of the prolific shale basins such as Marcellus and Haynesville where break-even drilling costs are below $4.
While drilling is still down over the past year or so, traders noted production has not slowed much, with government data Friday showing December gross natural gas output fell 0.7 percent from November because of well freeze offs but was still 0.9 percent above December 2008 levels.
Some traders said rig cuts eventually may be necessary to balance the market unless demand, particularly from the industrial sector, starts to recover with the economy, but few expected to see any significant rig declines as long as cash prices hover near current levels. (Reporting by Joe Silha; Editing by Lisa Shumaker)
Source: http://uk.reuters.com/article/idUKN2615063620100226
Comments
Post a Comment