NEW YORK, March 19 (Reuters) - The number of rigs drilling for natural gas in the United States climbed 12 this week to a 13-month high of 970, according to a report on Friday by oil services firm Baker Hughes in Houston.
It was the 12th straight weekly gain and puts the gas rig count at its highest level since Feb. 27, 2009, when there were 970 gas rigs operating.
The U.S. natural gas drilling rig count has rebounded 41 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 recent peak above 1,600 in September 2008, it now stands at 82 rigs, or nearly 10 percent, above the same week last year.
Many gas producers scaled back drilling operations earlier last year with credit tight and natural gas cash prices sinking late last 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.
With gas prices in the $4 area 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 .
But while drilling is still down over the past year or so, traders noted production has not slowed much, with recent government data 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.
(Reporting by Joe Silha; Editing by Marguerita Choy) Keywords: ENERGY NATGAS/RIGS (joe.silha@thomsonreuters.com; +1 646 223 6071 Reuters Messaging; joe.silha.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
It was the 12th straight weekly gain and puts the gas rig count at its highest level since Feb. 27, 2009, when there were 970 gas rigs operating.
The U.S. natural gas drilling rig count has rebounded 41 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 recent peak above 1,600 in September 2008, it now stands at 82 rigs, or nearly 10 percent, above the same week last year.
Many gas producers scaled back drilling operations earlier last year with credit tight and natural gas cash prices sinking late last 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.
With gas prices in the $4 area 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 .
But while drilling is still down over the past year or so, traders noted production has not slowed much, with recent government data 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.
(Reporting by Joe Silha; Editing by Marguerita Choy) Keywords: ENERGY NATGAS/RIGS (joe.silha@thomsonreuters.com; +1 646 223 6071 Reuters Messaging; joe.silha.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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