US drillers reduce oil and gas rigs in the US for the second week running - 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 the second week running for the first since early October.

The number of oil and gas drilling rigs, a good indicator of future production, dropped by one in the week ending November 22 to 583, the lowest level since early September.

This brings the total number of rigs down by 39 or 6% from this time last.

Baker Hughes reported that oil rigs increased by one this week to 479, while gas-rigs decreased by two to 98.

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 the fact that companies were more focused on paying off debt and increasing shareholder returns than raising output.

U.S. Oil Futures are down about 2% in 2024, after falling by 11% in the previous year. U.S. Gas Futures have risen about 42% in 2024, after plummeting by 44% last year.

The 25 independent exploration & production (E&P), companies tracked by U.S. financial firm TD Cowen, said they expected to spend roughly the same amount in 2024 as they did in 2023.

This compares to increases in spending of 27% per year in 2023, 40% per year in 2022 and only 4% per annum in 2021.

(source: Reuters)