Baker Hughes reports that US drillers have added oil and gas rigs to their fleet for the first time in 4 weeks.
Baker Hughes, a leading energy services company, said that the U.S. added oil and gas rigs this week for the first time since four weeks.
The number of oil and gas rigs, a good indicator of future production, increased by one in the week ending October 11.
Baker Hughes reported that the total number of rigs was down by 36 or 6% compared to this time last.
Baker Hughes reported that oil rigs increased by two this week to 481. Gas rigs dropped by one, to 101.
Pennsylvania saw two drillers reduce their rigs to 13 - the lowest number since July 2016.
Oil and gas rig counts dropped by about 20% in 2023 due to lower oil and natural gas prices, increased labor and equipment costs as a result of soaring inflation, and companies focusing on debt repayment and shareholder returns rather than increasing output. The rig counts increased by 33% in 2020 and 67% in 2011.
U.S. Oil Futures are up about 5% in 2024, after falling by 11% in the previous year. U.S. Gas Futures have also risen about 5% in 2024, after plummeting by 44% last year.
According to the U.S. Energy Information Administration's (EIA's) latest outlook, higher oil prices will prompt drillers in the United States to increase crude production 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.
Gas producers have reduced their drilling activity in recent months after the monthly average spot price at U.S. Henry Hub.
According to the EIA, this decline in drilling should lead to a drop in U.S. natural gas production to 103.5 billion cubic feet per day in 2024. This is down from 103.8 bcfd, a record-high, in 2023. (Reporting and editing by David Gregorio, Scott DiSavino).
(source: Reuters)
