Baker Hughes reports that the US oil and gas rig counts have reached their highest level since June.
Baker Hughes, a leading energy services company, said that U.S. firms added oil and gas rigs this week for the fourth consecutive week for the first since February.
The number of oil and gas drilling rigs, a good indicator of future production, increased by seven in the week ending September 26 to 549, its highest level since June.
Baker Hughes reported that despite this week's increase in rigs the total count is still 38 rigs or 6% lower than this time last year.
Baker Hughes reported that oil rigs increased by six this week to 424, the highest level since July. Gas rigs, on the other hand, fell by one, to 117, which is their lowest level since July.
The number of rigs in the Permian basin, which is the largest oil-producing shale deposit in the United States, fell by one, to 253. This was the lowest since September 20,21.
The number of rigs in the Utica formation, located in Pennsylvania, Ohio, and West Virginia along with the Marcellus, the largest gas-producing shale region in the United States, has increased by one, to 14. This is the highest it's been since March 2023.
The number of rigs in Ohio also increased by one, to 13, which is the highest level since February 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 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 from 2024 levels by around 4% by 2025.
This compares to roughly flat spending year-over-year in 2024 and increases of 27%, 40%, and 4%, respectively, in 2023. Analysts predicted that U.S. crude spot prices would fall for the third consecutive year in 2025. However, according to the U.S. Energy Information Administration's (EIA), crude production would increase from a record 13,2 million barrels per daily (bpd).
The EIA predicted a 61% rise in the price of spot gas
(source: Reuters)
