US drillers reduce oil and gas rigs in the US for a second consecutive week - Baker Hughes

Baker Hughes, a leading energy services company, said that the U.S. firms have cut back on the number of natural gas and oil rigs for a second consecutive week for the first since late June.

The number of oil and gas drilling rigs, a good indicator of future production, dropped by one in the week ending August 23.

Baker Hughes reported that the total number of rigs is 47 or 7% lower than it was at this time last.

Baker Hughes reported that oil rigs remained at 483 in this week's report, while gas-rigs dropped by one to 97.

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 companies focusing on debt repayment and shareholder returns rather than raising output.

U.S. Oil Futures are up about 5% in 2024, after falling by 11% in the previous year. U.S. Gas Futures are down about 19% in 2024, after plummeting by 44% last year.

According to the U.S. Energy Information Administration's (EIA's) latest outlook, an increase in oil prices will encourage 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 13.7 million bpd by 2025.

Gas prices fell to three-and-a half year lows in February, and producers cut back on drilling earlier this year.

According to the EIA, this decline in drilling should lead to a drop in U.S. natural gas production to 103.3 billion cubic feet per day in 2024. This is down from 103.8 bcfd, a record-high, in 2023. (Reporting and Editing by Margueritachoy)

(source: Reuters)