U.S. drillers added oil rigs for a 14th week in a row, extending an 11-month recovery that is expected to boost U.S. shale production in May in the biggest monthly increase in more than two years.
Drillers added five oil rigs in the week to April 21, bringing the total count up to 688, the most since April 2015, energy services firm Baker Hughes Inc said on Friday.
That is more than double the same week a year ago when there were only 343 active oil rigs.
U.S. crude futures dropped below $50 a barrel on Friday, for the first time in two weeks and putting it on track for its biggest weekly loss in six weeks, due to doubts the OPEC-led production cut will restore balance to an oversupplied market, especially as U.S. drillers keep producing more oil.
U.S. shale production in May was set for its biggest monthly increase in more than two years as producers stepped up their drilling activity, according to U.S. energy data
Analysts projected U.S. energy firms would boost spending on drilling and pump more oil and natural gas from shale fields in coming years with energy prices expected to climb.
Futures for the balance of 2017 were fetching around $50 a barrel and calendar 2018 was trading at about $51.
After taking a hit last year when dozens of U.S. shale producers filed for bankruptcy, private equity funds raised $19.8 billion for energy ventures in the first quarter - nearly three times the total compared with the same period last year, according to financial data provider Preqin.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray (PJR.SG)
, this week forecast the total oil and gas rig count would average 842 in 2017, 1,037 in 2018 and 1,170 in 2019. Most wells produce both oil and gas.
That compares with an average of 762 so far in 2017, 509 in 2016 and 978 in 2015, according to Baker Hughes data.
Analysts at U.S. financial services firm Cowen & Co said in a note this week that its capital expenditure tracking showed 57 exploration and production (E&P) companies planned to increase spending by an average of 50 percent in 2017 over 2016.
That expected spending increase in 2017 followed an estimated 48 percent decline in 2016 and a 34 percent decline in 2015, Cowen said according to the 64 E&P companies it tracks.
(Reporting by Scott DiSavino; Editing by Marguerita Choy)