The industry body now estimates 5,150 wells will be drilled across Canada this year, up from its previous 2017 forecast, made in November, of 4,175 wells.

Canada's oilfield service sector was hard hit by the collapse in global oil prices since mid-2014 as producers canceled exploration and drilling plans and slashed capital investment.

But with U.S. crude holding above $50 a barrel, roughly double the 13-year low it hit in February last year, the sector is seeing an increase in demand.

"Some of the Canadian oilfield service, supply and manufacturing sector are realizing some uptick in activity as oil prices recover and operators increase their drilling programs," PSAC Chief Executive Mark Salkeld said in a statement.

The new forecast puts Alberta as the top drilling province for 2017 with 2,706 new wells, followed by Saskatchewan with 1,985 and 367 in British Columbia.

(Reporting by Nia Williams; Editing by Sandra Maler)