US energy firms in the week to February 2 cut the number of oil and natural gas rigs operating for the first time in three weeks, energy services firm Baker Hughes said in its closely followed report on Friday, reports Reuters.
The oil and gas rig count, an early indicator of future output, fell by two to 619 in the week.
The US oil and gas rig count dropped about 20 per cent in 2023 after rising by 33 per cent in 2022 and 67 per cent in 2021, due mostly to a decline in oil and gas prices, higher drilling costs and as companies focused more on paying down debt and boosting shareholder returns rather than increasing output.
Baker Hughes said that puts the total rig count down by 140 rigs, or 18 per cent, below this time last year.
Baker Hughes said U.S. oil rigs held steady at 499 this week, while gas rigs fell by two to 117.
US oil futures were up about 1 per cent so far in 2024 after dropping by 11 per cent in 2023. US gas futures, meanwhile, were down about 18 per cent so far in 2024 after plunging by 44 per cent in 2023.
Fifteen of the independent exploration and production (E&P) companies tracked by US financial services firm TD Cowen said they planned to cut spending by around 3 per cent in 2024 versus 2023.
In 2023, 25 of the E&Ps TD Cowen tracks said they planned to raise spending by around 20 per cent versus the prior year after boosting spending about 40 per cent in 2022 and 4 per cent in 2021.
Despite lower prices, spending and rig counts, US oil and gas output was still on track to hit record highs in 2024 and 2025 due to efficiency gains and as firms complete work on already drilled wells.
The total number of drilled but uncompleted (DUC) wells remaining dropped to a record low of 4,374 in December.
US drillers cut oil, gas rigs to 619
FE Team | Published: February 03, 2024 21:43:17
US drillers cut oil, gas rigs to 619
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