US oil producers added rigs for the seventh week in a row, the longest period of expansion since the final days of the drilling boom in early 2014.
Rigs targeting crude in the US rose by 15 to 396, after seven were added last week, Baker Hughes Inc. said in a statement. Explorers have now added 66 rigs since June 24, led by rising activity in the Permian Basin in West Texas, Bloomberg reported.
This week’s additions mark the longest period of oilfield expansion since April 2014, when drillers added oil rigs nine weeks in a row. In the Permian, the country’s largest shale play, the count increased by 12 to 189 this week. A total of 56 oil rigs have been brought back to work in the area since mid-May.
"This is all about the Permian Basin," said James Williams, president of WTRG Economics in London, Arkansas. "All the evidence is that the economics are best for producing oil in the Permian Basin, but a 12-rig jump in one area is still a surprise."
Oil is heading for its biggest weekly gain since April after Saudi Arabia signaled it is prepared to discuss actions to stabilize markets at OPEC talks next month in Algiers.
"If this meeting in Algeria wasn’t in the wind, this would have knocked prices off by probably about a buck," said Williams.
