Fri Apr 16, 2010 10:47pm IST
NEW YORK, April 16 (Reuters) - The number of rigs drilling for natural gas in the United States climbed 14 this week to a 14-month high of 973, according to a report on Friday by oil services firm Baker Hughes in Houston.
It was the 16th straight weekly gain and puts the gas rig count at its highest level since Feb. 20, 2009, when there were 1,018 gas rigs operating.
The U.S. natural gas drilling rig count has rebounded by 308 rigs, or 46 percent, since bottoming at 665 on July 17, its lowest level since May 3, 2002, when there were 640 active gas rigs.
While the rig count is still well off its peak above 1,600 in September 2008, it now stands at 213 rigs, or 28 percent, above the same week last year.
Many gas producers scaled back drilling early last year with credit tight and natural gas cash prices sinking late last summer to about $2 per million British thermal units, a 7-1/2 year low and down 85 percent from July 2008 highs above $13.
With current gas prices of about $4, down more than 30 percent since early January highs above $6, some analysts expect to see a slowdown in drilling, noting current prices were no longer a strong incentive to start new wells.
The break-even point for some key shale basins like Haynesville in Louisiana and Marcellus in Appalachia ranges between $3.50 and $4, according to some analysts.
A number of producers have said they will reduce spending for gas drilling this year and focus instead on more profitable oil prospects, but that has not been reflected in the gas rig count yet.
And traders noted production has not slowed much, if at all, this year, with recent government data showing January gross natural gas output rose 0.9 percent from December and was still pegged at about 0.6 percent above January 2009 levels.
But the U.S. Energy Information Administration said last week it will revise the way it calculates gross domestic gas output starting with its February report due out on April 29, adding production in key states like Louisiana and Texas may be overstated and could see significant revisions.
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. (Reporting by Joe Silha; Editing by Lisa Shumaker)
Source: http://in.reuters.com/article/oilRpt/idINN1614413320100416?sp=true
NEW YORK, April 16 (Reuters) - The number of rigs drilling for natural gas in the United States climbed 14 this week to a 14-month high of 973, according to a report on Friday by oil services firm Baker Hughes in Houston.
It was the 16th straight weekly gain and puts the gas rig count at its highest level since Feb. 20, 2009, when there were 1,018 gas rigs operating.
The U.S. natural gas drilling rig count has rebounded by 308 rigs, or 46 percent, since bottoming at 665 on July 17, its lowest level since May 3, 2002, when there were 640 active gas rigs.
While the rig count is still well off its peak above 1,600 in September 2008, it now stands at 213 rigs, or 28 percent, above the same week last year.
Many gas producers scaled back drilling early last year with credit tight and natural gas cash prices sinking late last summer to about $2 per million British thermal units, a 7-1/2 year low and down 85 percent from July 2008 highs above $13.
With current gas prices of about $4, down more than 30 percent since early January highs above $6, some analysts expect to see a slowdown in drilling, noting current prices were no longer a strong incentive to start new wells.
The break-even point for some key shale basins like Haynesville in Louisiana and Marcellus in Appalachia ranges between $3.50 and $4, according to some analysts.
A number of producers have said they will reduce spending for gas drilling this year and focus instead on more profitable oil prospects, but that has not been reflected in the gas rig count yet.
And traders noted production has not slowed much, if at all, this year, with recent government data showing January gross natural gas output rose 0.9 percent from December and was still pegged at about 0.6 percent above January 2009 levels.
But the U.S. Energy Information Administration said last week it will revise the way it calculates gross domestic gas output starting with its February report due out on April 29, adding production in key states like Louisiana and Texas may be overstated and could see significant revisions.
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. (Reporting by Joe Silha; Editing by Lisa Shumaker)
Source: http://in.reuters.com/article/oilRpt/idINN1614413320100416?sp=true
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