Baker Hughes reports that US oil/gas rig counts have dropped for the 11th consecutive week, to their lowest level since 2021.
Baker Hughes, a leading energy services company, said that the U.S. firms have cut back on the number of oil rigs and natural gas production for the 11th consecutive week for the first since July 2020. This was when the COVID-19 epidemic reduced demand for fuel.
The number of oil and gas drilling rigs, a good indicator of future production, dropped by two in the week ending July 11 to 537, the lowest level since October 2021.
Baker Hughes reported that the rig count is down by 47 or 8% this week compared to this time last.
Baker Hughes reported that oil rigs dropped by one this week to 424, the lowest level since September 2021. Gas rigs remained unchanged at 108.
The number of rigs in Texas, which is the largest oil and gas producing State, fell by one, to 255. This is the lowest level since November 2021.
The Haynesville Shale in Arkansas, Louisiana, and Texas is one of the largest and fastest-growing gas producing areas in the United States. Its rig count has risen by one, to 38. This is the highest since March 2024.
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 on 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 2023.
The U.S. Energy Information Administration, however, projected that crude production would increase from a record 13,2 million barrels a day (bpd), in 2024, to approximately 13.4 million in 2025.
The EIA predicted a 68% rise in the price of spot gas
The EIA predicted that gas production would increase to 105.9 bcfd by 2025. This is up from 103.2 billion cubic feet (bcfd), and the record 103.6 bcfd of 2023. (Reporting and Editing by Marguerita Choy)
(source: Reuters)