Baker Hughes reports that US drillers have cut back on oil and gas rigs a second time in the last three weeks.

Baker Hughes, a leading energy services company, said that U.S. firms cut back on the number of natural gas and oil rigs for a second consecutive week in its closely watched report published Friday. The oil and natural gas rig count fell to 548, the lowest level since November 26, a good indicator of future production.

Baker Hughes reported that this week's decline "puts the total number of rigs down 41 rigs or 6.9% below last year at this time."

Baker Hughes reported that oil rigs increased by one this week to 414, the highest since November 21. Gas rigs dropped by two to 127.

Oil and gas rig counts?declined about 5% by 2024, and 20% by 2023. This is because lower U.S. oil prices and?gas over the last couple of years have prompted energy companies to focus on increasing shareholder returns and paying off debt instead of increasing output.

Analysts predicted that U.S. crude oil prices would fall for the third consecutive year in 2025. However, the U.S. Energy Information Administration forecasted that crude production would increase from a record 13,2 million barrels per daily in 2024 to around 13.6 millions bpd by 2025.

EIA predicted that a 63% increase in gas prices would be seen in 2025, which would encourage producers to step up drilling this year. A 14% drop in price in 2024 had caused several energy firms to reduce output in 2024 for the first since the COVID-19 Pandemic in 2020 reduced demand for fuel. EIA predicted that gas production would increase to 107.7 bcfd by 2025. This is up from the 103.2 bcfd of 2024, and a record high 103.6 bcfd of 2023. (Reporting and editing by Scott DiSavino, Anjana Anil)

(source: Reuters)