Baker Hughes: US drillers reduce oil and gas rigs in the US for the first time in 4 weeks.
Baker Hughes, a leading energy services company, said that the U.S. oil and gas companies have cut back on the number of oil rigs for the first time since four weeks.
The number of oil and gas drilling rigs, a good indicator of future production, dropped by one in the week ending Nov. 15 to 584, the lowest level since early September.
This is a reduction of 34 rigs, or 6% from the same time last year.
Baker Hughes reported that oil rigs dropped by one this week to 478. This is their lowest level since the week of July 19. Gas rigs were also down by one, to 101.
Oil and gas rig counts dropped by about 20% in the year 2023, after increasing by 33% and 67% respectively in 2022, 2021 and 2022. This was due to lower oil and natural gas prices and higher labor and equipment cost from rising inflation, as well as a focus on debt repayment and shareholder returns rather than raising output.
U.S. Oil Futures are down about 6% in 2024, after falling by 11% last year. U.S. Gas Futures are up 11% this year after plummeting by 44% the previous year.
According to the U.S. Energy Information Administration's (EIA) latest outlook, crude oil production in the United States is on track to increase from a record of 12.9 million barrels a day (bpd), in 2023, to 13.2 millions bpd by 2024, and to 13.5 million bpd by 2025.
However, the agency has slightly increased the oil production forecast for 2024 while reducing the outlook for 2025 from the report last month.
This week, the EIA also lowered its forecast for U.S.
Gas output
The 103.5 billion cubic feet expected last month has been reduced to 103.4 bcfd in 2024.
The gas production will decline from its record high of 103.8 billion cubic feet per day in 2023. This is the first drop since 2020 when the COVID-19 epidemic reduced demand for fuel.
Gas
Producers
Reduced spending on drilling earlier in the year following monthly average spot prices of the U.S. Henry hub
(source: Reuters)
