Baker Hughes reports that US drillers have added oil and gas rigs to their fleets for the third consecutive week.

Baker Hughes, a leading energy services company, said that U.S. firms added oil and gas rigs this week for the third consecutive week for the first since September.

In the week ending November 21, the oil and gas rig counts, a good indicator of future production, increased by five, to 554 - its highest level since June.

Baker Hughes reported that oil rigs increased by two this week to 419, the highest level since October. Gas rigs also rose by two, to 127.

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 and production firms tracked by U.S. Financial Services firm TD Cowen have said that they plan to reduce capital expenditures from 2024 levels by approximately 4% by 2025.

This compares to spending that is roughly flat in 2024. In 2023 and 2022, it increases by 27%, 40%, and 4%.

The U.S. Energy Information Administration predicted that crude production would increase from a record 13,2 million barrels per daily in 2024 to approximately 13.6 million bpd by 2025.

The EIA predicted that a 58% rise in gas spot prices in 2025 will prompt producers to increase drilling activity in this year. A 14% drop in price in 2024 caused a number of energy firms 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 107.7 trillion cubic feet per day in 2025. This is up from 103.2 billion cubic foot per day in 2024, and a record-breaking 103.6 bcfd for 2023. (Reporting and editing by Chris Reese, Nia Williams and Scott DiSavino)

(source: Reuters)