U.S. energy companies this week kept the number of oil and natural gas drilling rigs unchanged for the second straight week, energy services company Baker Hughes said in its closely watched report on Friday. .
The number of oil and gas drilling rigs, an early indicator of future production, remained at 589 in the week ending December 20.
According to Baker Hughes, the total number of drilling rigs fell by 31, down 5% from the same time last year.
Baker Hughes said the number of oil rigs increased by one unit to 483, while the number of natural gas rigs decreased by one unit to 102. drilling rigs for oil is the highest since September.
The number of oil and gas drilling rigs fell by about 20% in 2023 after increasing by 33% in 2022 and 67% in 2021, due to falling oil and gas prices, rising labor and equipment costs due to soaring inflation and as companies focused on paying down debt and increasing shareholder returns rather than increasing production.
U.S. oil futures were unchanged after the Baker Hughes data, leaving them down about 3% year to date, after falling 11% in 2023. The contracts U.S. gas futures are up about 49% so far in 2024, after falling 44% in 2023.
The 25 independent exploration and production (E&P) companies tracked by U.S. financial services firm TD Cowen said that on average, E&Ps planned to leave spending in 2024 roughly unchanged from 2023.
In comparison, spending will increase by 27% in 2023, 40% in 2022 and 4% in 2021.
U.S. crude oil production is expected to rise from a record 12.9 million barrels per day (bpd) in 2023 to 13.2 million bpd in 2024 and 13.5 million bpd in 2025, according to the latest outlook from the U.S. Energy Information Administration (EIA).
As for gas, several producers have reduced drilling activity this year after the monthly average spot price at the Henry Hub benchmark in Louisiana fell to a 32-year low in March, and is remained relatively low during the months that followed.
This reduction in drilling activity is expected to cause U.S. gas production to decline for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020.
The EIA projects gas production to fall to 103.2 billion cubic feet per day (bcfd) in 2024, down from a record 103.8 bcfd in 2023.
