US energy firms this week cut the number of oil and natural gas rigs operating for the fourth time in five weeks, energy services firm Baker Hughes BKR.O said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, fell by one to 538 in the week to August 22, the lowest since mid-July.
Baker Hughes said this week’s decline put the total rig count down by 47 rigs, or 8 percent below this time last year.
Baker Hughes said oil rigs fell by one to 411 this week, while gas rigs held steady at 122.
In Texas, the nation’s biggest oil- and gas-producing state, the rig count fell by two to 240, the lowest since September 2021.
In North Dakota, the nation’s third biggest oil-producing state behind Texas and New Mexico, the rig count fell by one to 28, the lowest since January 2022.
In the Williston shale in North Dakota and Montana, the rig count fell by one to 30, the lowest since January 2022.
The oil and gas rig count declined by about 5 percent in 2024 and 20 percent in 2023 as lower US oil CLc1 and gas NGc1 prices over the past couple of years prompted energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output.
The independent exploration and production (E&P) companies tracked by US financial services firm TD Cowen said they planned to cut capital expenditures by around 4 percent in 2025 from levels seen in 2024.
That compares with roughly flat year-over-year spending in 2024, increases of 27 percent in 2023, 40 percent in 2022, and 4 percent in 2021.
Even though analysts forecast US spot crude prices would decline for a third year in a row in 2025, the US Energy Information Administration (EIA) projected crude output would rise from a record 13.2 million barrels per day (bpd) in 2024 to around 13.4 million bpd in 2025.
On the gas side, EIA projected a 65 percent increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14 percent price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020.
EIA projected gas output would rise to 106.4 billion cubic feet per day (bcfd) in 2025, up from 103.2 bcfd in 2024 and a record 103.6 bcfd in 2023.
