Over the past week, the number of operating oil and gas rigs in the United States fell to the lowest level since January 2022: this is what Baker Hughes technicians say in their usual weekly report.
The number of oil and gas rigs, an early indicator of future production, fell by six to 594 in the week ending June 7, falling for the second time in three weeks, or 101 fewer (-15%) than at the same time during the past year.
Baker Hughes said oil rigs fell by four to a total of 492, the lowest level since January 2022, while the number of gas rigs fell by two to the lowest level since December 2020.
The number of oil and gas platforms decreased by about 20% in 2023 (after increasing by 33% in 2022 and 67% in 2021) due to falling oil and gas prices, rising costs of manpower and equipment due to the surge in inflation and due to the companies’ strategy of reducing debt and increasing shareholder returns at the expense of production.
U.S. oil futures rose about 6% in 2024 after plunging 11% in 2023, while U.S. gas futures rose about 16% after plunging 44% in 2023.
This increase in oil prices should encourage drillers to increase US crude oil production, which could rise from a record 12.9 million barrels per day in 2023 to 13.2 million barrels per day in 2024 and 13 .7 million barrels per day in 2025, according to the latest forecast from the US Energy Information Administration (EIA).
The decline in drilling is expected to push U.S. gas production down to 103.0 billion cubic feet per day (bcfd) in 2024, down from a record high of 103.8 bcfd in 2023, according to the EIA.
Source Reuters
