Baker Hughes reports that US drillers have cut back on oil and gas drilling for the first time in 3 weeks.

Baker Hughes, a leading energy services company, said that the U.S. oil and gas companies have cut back on the number of rigs for the first time since three weeks.

The number of oil and gas rigs, a good indicator of future production, dropped by three in the week ending May 2 to 584.

Baker Hughes reported that the number of rigs is down by 21 this week, or 3% from this time last year.

Baker Hughes reported that oil rigs dropped by four this week to 479, while gas-rigs increased by two to 101.

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 reducing debt than increasing production.

The price of crude oil has fallen by 20% since the COVID-19 pandemic in 2009.

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The current turmoil has raised questions as to whether or not producers will be able to meet their dividend and share repurchase goals - an important part of Big Oil’s strategy for wooing investors - without cutting capital expenditure budgets.

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On Friday, the company reiterated its earlier guidance that it would spend between $27 billion to $29 billion by 2025. CEO Darren Woods stated that despite pressures from investors who are looking to make short-term gains to reduce expenditures and give more money back to shareholders, the U.S. top oil producer would continue to invest to maintain its current position.

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The No. The U.S. oil producer ranked No. The No. (Reporting and Editing by Scott DiSavino)

(source: Reuters)