((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto)) by Scott DiSavino
U.S. energy companies this week reduced the number of oil and natural gas drilling rigs to their lowest level since January 2022, for the third week in a row, energy services company Baker said Hughes 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 588 during the week of June 21. RIG-USA-BHI
RIG-OL-USA-BHI RIG-GS-USA-BHI
According to Baker Hughes, the total number of drilling rigs was down by 94, down 14% from the same time last year.
Baker Hughes said the number of oil drilling rigs fell by three to 485 this week, its lowest level since January 2022, while gas drilling rigs remained unchanged for a third consecutive week, at 98, their lowest level since October 2021.
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.
Goldman Sachs said this week that the number of rigs in the Permian Basin, the largest U.S. oil field, is expected to move relatively flat this year, but fall below 300 by end of 2026, as US producers remain capital disciplined.
In the Permian Formation of west Texas and east New Mexico, the total number of oil and gas wells fell by one to 308 this week, the lowest level since January, according to Baker Hughes.
Production growth in the maturing Permian formation is expected to gradually slow from an exceptionally high level of 520,000 barrels per day in 2023 to a still-robust level of 270,000 bpd in 2026, the report said.
U.S. oil CLc1 futures are up about 10% so far in 2024 after falling 11% in 2023, while U.S. gas NGc1 futures have gained about 7% so far. present in 2024 after falling by 44% in 2023.
