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US shale drillers restart oil rigs as market begins to balance
[HOUSTON] Oil explorers put drilling rigs back to work in US fields for only the second time this year as supply and demand begin to come closer into balance.
Rigs targeting crude in the US rose by 9 to 325, after 2 were dropped last week, Baker Hughes Inc said Friday. Explorers have idled more than 1,000 oil rigs since the start of last year. Natural gas rigs were trimmed by 5 to 82, bringing the total for oil and gas up by 4 to 408.
After the worst downturn in decades led oil producers to scrap projects and cut spending on drilling, traders see signs supply and demand are getting close to being in balance.
Disruptions in Canada and Nigeria took 50 million barrels out of the market last month, Geneva-based trading house Mercuria Energy Group Ltd estimated.
"The rebalancing is happening a bit faster than anticipated because of the disruptions," Mercuria chief executive officer Marco Dunand said in an interview. "Demand is also stronger than expected" in countries from India to the US, he said.
The International Energy Agency forecasts oil demand will increase this year by 1.2 million barrels a day, while Mr Dunand said growth is likely to top 1.5 million, perhaps rising as high as 1.8 million.
America's oil drillers have been idling rigs since October 2014 as the world's largest crude suppliers battle for market share. Despite the cutbacks, US production has only recently begun to falter as new techniques that increase efficiency keep the oil flowing.
US output declined for a 12th week and crude stockpiles dropped in the week ended May 27, according to a report from the Energy Information Administration.