Baker Hughes reports that US drillers added oil and gas rigs in the US for the second consecutive week.

Baker Hughes, a leading energy services company, said that U.S. firms added natural gas and oil rigs this week for the second consecutive week for the first since April. The number of oil and gas drilling rigs, a good indicator of future production, increased by two in the week ending September 12. Baker Hughes reported that oil rigs increased by two this week to 416, the highest level since July. Gas rigs remained at 118.

Oil and gas rig counts declined by around 5% in 2020 and 20% in 2023, as lower U.S. gas and oil prices in the last couple of years led energy firms to place more emphasis on increasing shareholder returns and paying off debt than increasing production. The U.S. financial firm TD Cowen tracked independent exploration and production companies (E&P), which said that they would cut capital expenditures in 2025 by around 4% from the levels in 2024.

This compares to roughly flat spending year-over-year in 2024 and increases of 27%, 40%, and 4%, respectively, in 2023. Analysts predicted that U.S. crude spot prices would fall for the third consecutive year in 2025. However, according to the U.S. Energy Information Administration's (EIA), crude production would increase from a record 13,2 million barrels per daily (bpd).

The EIA predicted a 61% rise in the price of spot gas Prices in 2025 will prompt producers to increase drilling activity in this year. A 14% drop in price in 2024 forced several energy firms in the industry to reduce output for the very first time since 2020, when the COVID-19 epidemic reduced demand for fuel.

The EIA predicted that gas production would increase to 106.6 billion cubic foot per day (bcfd), up from 103.2 billion cubic feet in 2024, and a record-breaking 103.6 bcfd for 2023. (Reporting and Editing by Marguerita Choy)

(source: Reuters)