US energy firms this week cut the number of oil rigs operating for a second week in a row to the lowest since January 2022, energy services firm Baker Hughes said in its closely followed report on Friday, reports Reuters.
The combined oil and natural gas rig count, traditionally an early indicator of future output, fell by two to 616 in the week to Nov. 10, the lowest since February 2022.
Baker Hughes said that puts the total rig count down 163, or 21 per cent, below this time last year.
The number of active rigs has dropped since December due to weaker energy prices and as many firms return profits to investors and pay down debt rather than spending to boost production. However, U.S. oil and gas production is still set to hit record highs this year as demand grows and the industry boosts efficiency to offset the impact of the lower prices.
The number of oil rigs fell by two to 494 this week, while gas rigs were unchanged at 118.
US oil futures were down about 4 per cent so far this year after gaining about 7 per cent in 2022. US gas futures , meanwhile, have plunged about 32 per cent so far this year after rising about 20 per cent last year.
Despite lower prices for oil and gas, independent exploration and production companies tracked by US financial services firm TD Cowen were set to raise spending by about 20 per cent this year, a slight increase from earlier expectations of a 19 per cent hike. Spending rose about 40 per cent in 2022 and 4 per cent in 2021.
US drillers cut oil rigs to lowest since Jan 2022 for second week
FE Team | Published: November 11, 2023 21:17:26
US drillers cut oil rigs to lowest since Jan 2022 for second week
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