NEW YORK, Jan 29 - The number of rigs drilling for natural gas in the United States jumped 28 this week to a 10-1/2 month high of 861, according to a report on Friday by oil services firm Baker Hughes in Houston.
The latest gas rig count is the highest since March 13, 2009, when there were 884 gas rigs operating.
The U.S. natural gas drilling rig count has rebounded nearly 30 percent after bottoming at 665 on July 17, its lowest level since May 3, 2002, when there were 640 active gas rigs.
But the rig count is still well off its recent peak above 1,600 in September 2008, and still stands at 289 rigs, or 25 percent, below the same week last year.
Many gas producers had scaled back drilling operations earlier this year with credit tight and natural gas cash prices sinking this 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.
But cash gas prices have more than doubled since hitting their late summer lows, hovering in the $5.25 area this week, a level high enough to encourage more onshore drilling, particularly in some of the prolific shale basins.
While drilling is still down over the past year or so, traders noted production has not slowed that much, with recent government data estimating that January marketed gas output will be about 2.3 percent lower than in January 2009.
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, but few expected to see any steady rig declines with cash prices at current levels.
The latest gas rig count is the highest since March 13, 2009, when there were 884 gas rigs operating.
The U.S. natural gas drilling rig count has rebounded nearly 30 percent after bottoming at 665 on July 17, its lowest level since May 3, 2002, when there were 640 active gas rigs.
But the rig count is still well off its recent peak above 1,600 in September 2008, and still stands at 289 rigs, or 25 percent, below the same week last year.
Many gas producers had scaled back drilling operations earlier this year with credit tight and natural gas cash prices sinking this 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.
But cash gas prices have more than doubled since hitting their late summer lows, hovering in the $5.25 area this week, a level high enough to encourage more onshore drilling, particularly in some of the prolific shale basins.
While drilling is still down over the past year or so, traders noted production has not slowed that much, with recent government data estimating that January marketed gas output will be about 2.3 percent lower than in January 2009.
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, but few expected to see any steady rig declines with cash prices at current levels.
