US natgas rig count rises, 2nd gain in 3 weeks-Baker Hughes

Reuters

* Gas rig count climbs 3 after last week's drop

* Horizontal rigs fall for first time in 3 weeks

* Oil rig count off 6 to 1,361, 2nd straight decline

NEW YORK, Oct 18 (Reuters) - The number of rigs drilling for

natural gas in the United States rose this week for the second

time in three weeks, climbing by three to 372, data from

Houston-based Baker Hughes showed on Friday.

The gas-directed rig count, which posted a six-month high of

401 five weeks ago, has increased in 10 of the last 17 weeks and

is above the 18-year low of 349 set in late June.

A rising gas rig count can stir talk that new pipelines and

processing plants, particularly in the East, may be encouraging

producers to hook up more wells and pump more supply into an

already well-supplied market.

Gas futures prices on Friday, which were slightly higher at

$3.76 per million British thermal units just before rig data was

released at 1 p.m. EDT (1700 GMT), edged up about a penny after

the report.

The oil-focused rig count fell for the third time in four

weeks, dropping 6 to 1,361. The oil rig count hit a nine-month

high of 1,413 in mid-June, Baker Hughes data showed. The oil

count is down 49 rigs, or 3.5 percent, from the same week last

year.

Baker Hughes reported horizontal rigs, the type often used

to extract oil or gas from shale, posted their first decline in

the last three weeks, shedding 7 to 1,099.

The horizontal count is down 7.9 percent from the record

high of 1,193 set in May 2012.

While the gas rig count is off 60 percent since peaking in

October 2011 at 936, gas production has not slowed much, if at

all, from the record high hit last year. The associated gas

produced from more profitable shale oil and shale gas liquids

wells has kept dry gas flowing at or near a record pace.

The U.S. Energy Information Administration last week raised

its estimate for domestic gas production in 2013, expecting

average output this year to post a record high for the third

straight year.

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