U.S. oil drillers add rigs despite crude prices collapse-Baker Hughes

By Scott DiSavino
July 24 (Reuters) - U.S. energy firms added 21 oil rigs this
week after pulling seven rigs last week, despite a 21 percent
collapse in U.S. crude prices from a recent high in June, data
showed on Friday, a sign some drillers were returning to the
well pad.
The gain this week, however, was only the third increase
over the past 33 weeks, bringing the total rig count up to 659,
the highest since late May, oil services company Baker Hughes
Inc BHI.N said in its closely followed report.
U.S. crude oil futures CLc1 this week entered a bear
market when prices fell near $48 a barrel from a recent high
over $61 in late June. A 20 percent downturn is considered by
many traders to constitute a bear market.
Analysts said both U.S. and Brent LCOc1 crude futures were
trading at their lowest levels since March on lackluster global
demand growth and lingering oversupply concerns as the
Organization of the Petroleum Exporting Countries (OPEC), the
United States and other producers continue pumping record or
near record amounts of oil out of the ground. O/R
The current bear market was the biggest decline for U.S.
crude futures since the front-month fell nearly 60 percent from
over $107 in June 2014 to under $44 in January due to those same
oversupply and uninspiring demand growth worries.
In response to that near 60 percent price collapse, U.S.
drillers eliminated thousands of jobs and idled 60 percent of
the record high 1,609 oil rigs that were active in October.
Despite those cuts, U.S. crude production has averaged 9.6
million barrels per day for nine weeks in a row, its highest
level since the early 1970s, according to government data.
Analysts however expect the rig count declines over the past
six months to start to bite in the third quarter of 2015.
"The current rig count is pointing to U.S. production
declining slightly sequentially between the second and third
quarters of 2015," analysts at Goldman Sachs said in a report.