Baker Hughes reports that US drillers have cut oil/gas drilling rigs by 7th week, to the lowest level since 2021.
Baker Hughes, a leading energy services company, said that the U.S. firms have cut back on the number of natural gas and oil rigs for the seventh consecutive week. This is the lowest level since November 2021.
The number of oil and gas drilling rigs, a good indicator of future production, dropped by four in the week ending June 13 to 555.
Baker Hughes reported that the decline this week brings the total number of rigs down by 35 or 6% from this time last.
This week the oil rig count dropped by three, to 439, its lowest level since October 2021. Gas rigs fell by one, to 113.
The total number of rigs in the Permian Basin in West Texas, eastern New Mexico and Texas dropped this week to its lowest level since November 2021.
The number of rigs in New Mexico fell to its lowest level since December 2021 this week.
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 spending that is roughly flat in 2024 and increases of 27%, 40%, and 44% in 2023.
The U.S. Energy Information Administration, however, projected that crude production would increase from a record 13,2 million barrels per daily (bpd), in 2024, to around 13,4 million bpd by 2025.
The EIA predicted an 84% rise in the price of spot gas
The EIA predicted that gas production would increase to 105.9 bcfd by 2025. This is up from 103.2 billion cubic feet (bcfd), and the record 103.6 bcfd of 2023. (Reporting and Editing by Marguerita Choy)
(source: Reuters)
