US energy companies reduced the number of oil and gas rigs operating for the second week in a row, Reuthers said.
Energy services company Baker Hughes (BKR.O) said in the report that US energy companies cut oil and gas rigs for the first time since June. The oil rig count remained unchanged this week at 483, while the gas rig count decreased by one to 97.
Hence, the number of oil and gas rigs, an early indicator of future production, fell by one to 585 for the week ended 23 August. Baker Hughes said the total rig count was down 47, or 7 per cent, from the same period last year.
The oil and gas rig count is down about 20 per cent in 2023 after rising 33 per cent in 2022 and 67 per cent in 2021 due to lower oil and gas prices, higher labour and equipment costs due to soaring inflation. The problem is reinforced by companies focusing on paying down debt and increasing shareholder returns instead of increasing production.
Oil futures are up about 5 per cent in 2024 after falling 11 per cent in 2023, while gas futures are down about 19 per cent in 2024 after falling 44 per cent in 2023.
The US Energy Information Administration (EIA) has predicted that rising oil prices should encourage drillers to increase US crude oil production from a record 12.9 million barrels per day (bpd) in 2023 to 13.2 million bpd in 2024 and 13.7 million bpd in 2025.
Several gas producers have cut drilling spending after prices fell to their lowest in 3.5 years in February and March. The EIA predicts that the drilling cuts should reduce US gas production to 103.3 billion cubic feet per day (bcfd) in 2024.
