Apr 5, 2021 - Economy

U.S. oil rig count climbs, signaling revival from pandemic lows

Data: Baker Hughes; Chart: Axios Visuals
Data: Baker Hughes; Chart: Axios Visuals

The number of U.S. oil drilling rigs in operation last week climbed by 13 to reach 337, Baker Hughes data shows.

Why it matters: It's the highest in nearly a year and, as Reuters notes, the increase was the largest since January 2020.

The increases — a signal of future output rises — are a sign of some activity returning from the pandemic as prices have risen.

The big picture: The Wall Street Journal explains why Pioneer Natural Resources' $6.4 billion deal to acquire DoublePoint Energy announced last week is another sign of life in the U.S. oil patch.

"A surge in the shares of U.S. oil producers, following the rollout of Covid-19 vaccines and a slow but steady recovery in oil demand, is enabling larger companies to use their equity to pay for targeted acquisitions," it reports.

But, but, but: It will be a long time before U.S. production approaches its pre-pandemic high of around 13 million barrels per day — if it ever happens.

The future of global demand growth is pretty hazy, while shale companies are under investor pressure to show returns instead of relentlessly pursuing growth.

What's next: The Energy Information Administration's next monthly look-ahead arrives tomorrow.

  • Last month the EIA forecast that U.S. production will average 11.1 million barrels per day this year and 12 million in 2022.
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