Baker Hughes reports that US drillers have cut oil and gas rigs 12 times in 13 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 12th consecutive week.
The number of oil and gas drilling rigs, a good indicator of future production, dropped by two in the week ending July 25.
Baker Hughes reported that the number of rigs is down by 47, or 8 percent compared to this time last.
Baker Hughes reported that oil rigs dropped by seven this week to 415, their lowest level since September 2021. Gas rigs, on the other hand, rose by five, to 122, reaching their highest level since August 2023.
The combined rig number fell in July for the fifth consecutive month.
Baker Hughes joined Halliburton, SLB and other U.S. competitors in warning this week of a decline in spending and activity in the upstream sector. Low and volatile oil prices are forcing producers to reduce capital expenditure and drilling.
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 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 a 68% 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)
