Baker Hughes reports that US oil/gas rig counts have fallen for the 6th consecutive week, to levels not seen since 2021.
Baker Hughes, a leading energy services company, said that the U.S. firms have cut back on the number of natural gas and oil rigs for the sixth consecutive week for the first since September 2023.
The number of oil and gas drilling rigs, a good indicator of future production, dropped by four in the week ending June 6, to 559, the lowest level since November 2021.
Baker Hughes reported that oil rigs dropped by nine this week to 442 while gas rigs increased by five to 114.
The company has announced that it has corrected the oil and gas classifications of approximately 8 to 10 rigs located in the Marcellus-Utica basins as of April 4, 2019. The total reported rig count for all historical periods remains unchanged.
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.
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 approximately 3% from the levels in 2024.
This compares to spending that is roughly flat in 2024 and increases of 27%, 40%, and 44% in 2022, as well as a nearly flat level in 2023.
The U.S. Energy Information Administration, however, projected that crude production would increase from a record 13,2 million barrels of oil per day in 2024 to approximately 13.4 million barrels in 2025.
The EIA predicted an 88% rise in the price of spot gas
The EIA predicted that gas production would increase to 104.9 billion cubic feet per day in 2025. This is up from 103.2 billion cubic foot per day in 2024, and a record high of 103.6 bcfd set in 2023. (Reporting and Editing by Marguerita Choy)
(source: Reuters)
