((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto)) by Scott DiSavino
U.S. energy companies reduced the number of oil and natural gas drilling rigs this week for the third consecutive week, energy services company Baker Hughes said
BKR.O in its closely followed report on Friday.
The number of oil and gas drilling rigs, an early indicator of future production, fell by two to 603 during the week of May 10, the lowest since January 2022. RIG-USA-BHI RIG- OL-USA-BHI RIG-GS-USA-BHI
Baker Hughes said that puts the total number of rigs down by 128, or 18% less than this time last year.
The number of oil drilling rigs fell by three to 496 this week, its lowest level since November, while the number of gas drilling rigs rose by one to 103, according to Baker Hughes.
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 lower 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 increase in production.
U.S. oil futures CLc1 are up about 9% so far in 2024, after falling 11% in 2023. U.S. gas futures
NGc1, meanwhile, have fallen about 10% so far in 2024 after dropping 44% in 2023.
This rise in oil prices should encourage drillers to increase crude production in the United States. This week, however, the government slightly revised downwards its production forecast for this year, to 13.2 million barrels per day (bpd), which is still an increase from the record of 12.9 million barrels. in 2023. It forecasts slightly higher production of 13.7 million bpd in 2025.
Occidental Petroleum OXY.N said this week it plans to increase oil production in the Permian Basin in the second half of 2024, with efficiency gains allowing the company to reduce the number of drilling rigs in the main oil field in the United States.
The fall in NGc1 gas prices to 3 1/2 year lows in February and March has already prompted several producers to cut spending and drilling activity, which is expected to drop U.S. gas production to 103.0 billion cubic feet per day (bcfd) in 2024, compared to a record 103.8 bcfd in 2023, according to the EIA.
