Baker Hughes reports that US drillers have cut their oil and gas rigs in the US for a third consecutive week.
Baker Hughes, a leading energy services company, said that the U.S. firms have cut back on oil and gas rigs for a third consecutive week.
The number of oil and gas rigs, a good indicator of future production, dropped by one in the week ending August 8 to 539.
Baker Hughes reported that oil rigs increased by one this week to 411, gas rigs decreased by one, to 123 and miscellaneous drilling rigs dropped by one, to five.
The number of rigs in Texas, which is the largest oil and gas producing state, fell by two, to 243. This is the lowest level since October 2021.
The number of rigs in the Permian Basin, located in West Texas and Eastern New Mexico, is down by three, to 256. This is the lowest level since September 2021.
The Eagle Ford Shale in South Texas saw a drop of one rig to 38. This is the lowest number since October 2021.
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.
TD Cowen, a U.S.-based financial services company, said that the independent exploration and production companies (E&Ps) tracked by it planned to reduce capital expenditures in 2025 by around 4% from 2024 levels.
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 a 68% rise in the price of spot gas
(source: Reuters)
