Baker Hughes reports that US drillers have added oil and gas rigs to their fleet for the first time in 5 weeks.
Baker Hughes, a leading energy services company, said that the U.S. added the most oil and gas rigs in a week in the past year.
In the week ending Sept. 13, the oil and gas rig counts, a good indicator of future production, increased by eight to 590. This is a return to levels seen in mid-June. This was the largest increase since the week of Sept. 15, 2023.
Baker Hughes reported that despite this week's increase in rigs the total number was still 51 rigs or 8% below last year at this time.
Baker Hughes reported that oil rigs increased by five this week to 488. Gas rigs also rose by three, to 97.
Oil and gas rig counts dropped by about 20% in the year 2023, after increasing by 33% and 67% respectively in 2022. This was due to lower oil and natural gas prices and higher labor and equipment cost from inflation. Companies also focused more on reducing debt and boosting shareholders returns rather than raising production.
U.S. Oil Futures are down about 3% in 2024, after falling by 11% in the previous year. U.S. Gas Futures are down about 7.5% in 2024, after plummeting by 44% last year.
According to the U.S. Energy Information Administration's (EIA's) latest outlook, despite the drop in oil prices, U.S. drillers are still on course to increase U.S. crude production from a record of 12.9 million barrels a day (bpd), in 2023, to 13.3 millions bpd by 2024, and to 13.7 million bpd by 2025.
Gas producers have reduced their drilling activity in recent years due to the spot price of U.S. Henry Hub
According to the EIA, this decline in drilling should lead to a drop in U.S. natural gas production to 103.4 billion cubic feet per day in 2024. This is down from 103.8 bcfd, a record-high, in 2023. (Reporting and editing by Scott DiSavino, Anushree mukherjee)
(source: Reuters)
