Baker Hughes reports that US drillers have cut back on oil and gas drilling for the first time in six weeks.
Baker Hughes, a leading energy services company, said that the U.S. oil and gas companies have reduced the number of oil rigs in operation this week, the first time in six weeks.
The number of oil and gas rigs, a good indicator of future production, dropped by two in the week ending October 10 to 547.
Baker Hughes reported that the total number of rigs is down 39, or 7% from this time last.
Baker Hughes reported that oil rigs dropped by four this week to 418, while gas-rigs increased by two to 120 – their highest level since August.
The Permian Basin, which is the largest oil-producing shale production formation in the United States, saw its rig count drop by one this past week, to 250. This is the lowest it has been since September 2021.
The number of rigs in Texas dropped six rigs this week, to 238. This is the lowest it has been since September 2021.
Oil and gas rig counts declined by about 5% and 20% respectively in 2024, as the lower U.S. gas and oil prices in recent years led energy firms to place more emphasis on increasing shareholder returns and paying off debt than on increasing production. The U.S. financial firm TD Cowen tracked independent exploration and production companies, or E&P. These firms said they would cut capital expenditures in 2025 by around 4% from the levels in 2024.
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).
EIA predicted a 56% rise in the price of spot gas
(source: Reuters)