U.S Oil Drilling Firms Increase Exploration Despite Price Plunge

Oil producing companies in the United States have intensified their search for crude oil in spite of the lingering weak crude prices.

This is a signal that the oil market may continue to witness lull following expected production in medium and long term.

Baker Hughes data showed that drillers added 2 oil rigs in the week ended Nov. 13, bringing the total rig count up to 574, oil Services Company Baker Hughes Inc said in its closely followed report.

That total is about a third of the 1,578 oil rigs operating in same week a year ago. Over the prior 10 weeks, drillers cut 103 oil rigs.

The additions this week showed that at least some drillers were willing to start drilling again even with U.S. oil prices trading in the $40s a barrel in hopes of higher prices in the future. U.S. oil futures averaged $43 a barrel so far this week, down from $46 last week.

Crude futures were on track for their biggest weekly loss in more than two months as swelling stocks weighed on the market.

In the minutes after Baker Hughes released the report, U.S. crude prices slupmed about 20 cents to around $40.50 a barrel.

Energy traders noted the rate of weekly oil rig reductions over the past two months, about 10 on average, was much lower than the 19 rigs cut on average over the past year or so since the number of rigs peaked at 1,609 in October 2014, due in part to expectations of slightly higher prices in the future.

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