Baker Hughes reports that US drillers have cut their oil and gas rigs a second time in a week.

Baker Hughes, an energy services company, said that the U.S. firms have cut back on the number of oil and gas rigs for a second consecutive week for the first time since August.

The number of oil and gas rigs, a good indicator of future production, dropped by six in the week ending December 19. This is the lowest since September.

Baker Hughes reported that oil rigs dropped by eight this week to 406; their lowest level since September 2021. Gas rigs remained at 127, and miscellaneous?rigs increased by two to 9.

Oil and gas rig counts are expected to decline by 5% in 2024, and by 20% in 2023. This is because lower U.S. gas and oil prices have prompted energy companies to concentrate more on increasing shareholder returns and paying off debt than increasing production.

The U.S. Energy Information Administration projected that even though analysts predicted U.S. crude spot prices would fall for the third consecutive year in 2025, they still expected a decline.

Crude output

The number of barrels produced per day would increase from 13.2 million in 2024, to 13.6 million in 2025.

EIA predicted that a 63% increase in gas prices by 2025 would encourage producers to increase drilling this year. This is after a price drop of 14% in 2024 caused several energy firms, including BP and Shell, to reduce output for the very first time since 2020 when the COVID-19 Pandemic reduced demand for the fuel.

EIA project

Gas output

The volume of air pollution in the United States will increase to 107.7 million cubic feet per day in 2025. This is up from 103.2 billion cubic foot per day in 2024, and 103.6 bcfd at a record level in 2023. (Reporting and editing by David Gregorio, Scott DiSavino).

(source: Reuters)