Baker Hughes reports that US drillers have added oil and gas rigs to their fleets for the second week running.
Baker Hughes, a leading energy services company, said that U.S. firms added oil and gas rigs this week for the second consecutive week for the first since September.
The number of oil and gas drilling rigs, a good indicator of future production, increased by two in the week ending October 24 to reach 550, its highest level since June.
Baker Hughes reported that despite this week's increase in rigs the total number of rigs was still 35 rigs or 6% lower than this time last year.
Baker Hughes reported that oil rigs increased by two this week to 420, while gas-rigs remained at 121.
The number of rigs in the largest oil and gas producing states fell from 236 to 236, which is the lowest level since September 2021.
The number of rigs in Louisiana has risen by three, to 40. This is the highest level since October 2024.
Oil and gas rig counts are expected to decline by 5% and 20% respectively in 2024, as the lower U.S. gas and oil prices in recent years have prompted energy companies to concentrate more on increasing shareholder returns and paying off debt than increasing production.
The independent exploration companies (E&Ps) tracked by U.S. Financial Services firm TD Cowen have said that they plan to reduce capital expenditures in 2025 by approximately 3% 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 that a 56% rise in gas spot prices in 2025 will prompt producers to increase drilling activity in this year. A 14% drop in price in 2024 had caused several energy companies 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 107.1 billion cubic feet per day in 2025. This is up from 103.2 billion cubic foot per day in 2024, and a record high of 103.6 bcfd for 2023. (Reporting and Editing by Marguerita Choy)
(source: Reuters)
