Baker Hughes reports that US oil and gas drillers have cut back on rigs in the US 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 for 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.
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.
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 reducing debt than increasing production.
The independent exploration companies (E&Ps) tracked by U.S. Financial Services firm TD Cowen have said that they plan to reduce capital expenditures in 2025 by 4% from the levels in 2024.
This compares to spending that is roughly flat in 2024. In 2023 and 2022, it increases by 27%, 40%, and 4%.
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 approximately 13.5 million in 2025.
EIA predicted a 56% rise in the price of spot gas
EIA predicted that gas production would increase to 107.1 billion cubic feet per day in 2025. This is up from 103.2 billion cubic foot per day in 2024, and a record-breaking 103.6 bcfd for 2023. (Reporting and editing by David Gregorio, Scott DiSavino).
(source: Reuters)