Energy firms in Canada boosted the number of rigs drilling for oil and natural gas last week by the most since January 2015 as producers returned en masse from Christmas breaks to take advantage of rising crude prices.
Drillers added 118 rigs during the week ended Jan. 10, bringing the total count up to 203, the highest since March 2019, data from Baker Hughes Co (BKR.N) showed on Friday.
That was the biggest weekly increase since drillers added 158 rigs during the week of Jan. 9, 2015.
Most of the rigs added last week were in Alberta (69) and Saskatchewan (42).
Drillers in Canada, like their counterparts in the United States, slashed the number of rigs operating in 2019 as energy prices dropped due to a global glut.
In the last few months of 2019, however, U.S. crude futures CLc1 jumped about 29% as prices rose from a near two-month low of $50.99 per barrel on Oct. 3 to an eight-month high of $65.65 on Jan. 8.
Looking forward, U.S. futures CLc1 were trading around $57 a barrel for the balance of 2020 CLBALst and $53 for calendar 2021 CLYstc1. That compares with an average of $64.90 in 2018 and $57.04 in 2019.
Drilling in Canada is seasonal.
The Canadian rig count usually increases in January as producers start drilling again after a Christmas break before declining in the spring when the snow melts and it becomes too muddy to operate. The industry calls that snow melt the spring break up.
The rig count increases again in the summer when the ground dries and usually holds onto those gains through December when the count drops during the last week of the year for the Christmas break.
In 2019, the rig count jumped from 70 during the last week of 2018 to a high for the year of 243 in February before falling as low as 61 during the spring break up in May.
The count then climbed to 150 rigs during the summer and 153 by mid December as rising crude prices encouraged drillers to add rigs before falling to 85 during New Year’s week in 2020.
© 2020 Reuters