UPDATE 1-U.S. oil drillers add rigs even as prices dive anew - Baker Hughes

(Adds rig count by basin in paragraph 6)
By Scott DiSavino
Aug 14 (Reuters) - U.S. energy firms added oil rigs for a
fourth straight week, according to data that highlights how a
period of stable prices earlier this summer lulled some drillers
into stepping up spending just before a second oil market slump.
Reflecting plans announced in May and June, when U.S. crude
futures CLc1 averaged $60 a barrel, drillers added two oil
rigs in the week ended Aug. 14, bringing the total count up to
672, the highest since early May, oil services company Baker
Hughes Inc BHI.N said in its closely followed report.
They may now regret those moves as U.S. crude has tumbled
nearly $20 a barrel to reach a new 6-1/2-year low under $42,
prompting a new round of spending and job cuts across the
beleaguered global oil industry.
Many forecasters including Australian bank Macquarie expect
the rig count to resume drifting lower through the second half
of the year as weaker prices bite.
While the number of rigs is still 58 percent lower than it
was at its peak last October, the slight rebound over the past
month suggests U.S. oil production may be slightly higher than
earlier expected, although the effect will take time to see. It
can take up to six months for a new well to begin pumping crude.
Drillers added oil rigs in two of the four major U.S. shale
oil basins, with five in the Eagle Ford in South Texas and one
in the Niobrara in Colorado and Wyoming. They removed two rigs
in the Bakken in North Dakota and Montana, while the number of
rigs in the Permian in West Texas and eastern New Mexico held
steady.
U.S. crude oil prices were on track for a seventh straight
weekly loss, the longest losing steak since January, on
continued oversupply worries from mostly U.S. and OPEC producers
and slumping demand from China and much of the rest of the
world. O/R
The last time oil prices collapsed, from around $107 a
barrel in June 2014 to under $44 in January, energy firms
slashed spending, cut thousands of jobs and idled around 60
percent of the record high 1,609 oil rigs that were active in
October.
Production has started to show signs of decline. U.S. crude
output dipped to 9.4 million barrels per day last week from 9.5
million bpd in the prior week, according to government data.
That is down from average production from mid May to late June
of 9.6 million bpd, the most since the early 1970s.