U.S. energy firms cut the number of oil rigs operating for the first time since March even though higher oil prices in recent months have prompted some drillers to return to the wellpad.
U.S. oil rigs fell one to 343 in the week to April 23, while gas rigs remained unchanged at 94, according to data on Friday from energy services firm Baker Hughes Co.
The U.S. oil and gas rig count, an early indicator of future output, fell by one to 438 this week. Before this week, drillers added rigs for five weeks in a row.
That puts the combined rig count up 80% since falling to a record low of 244 in August 2020, according to Baker Hughes data going back to 1940. The total count, however, is still 27 rigs, or 6%, below this time last year.
Enverus, a provider of energy data with its own rig count, meanwhile, said its count of 517 on April 21 was up 11% from the same period last year.
That is due to the massive drop in the rig count in April 2020 when energy demand destruction from the coronavirus caused oil futures to turn negative and drillers to cut 263 rigs, according to Baker Hughes data, which will likely show the rig count will rise above the year ago next week.
Baker Hughes’ rig count was 408 for the week ended May 1, 2020.
U.S. crude futures were trading around $62 a barrel on Friday, putting the contract on track to rise in April for a fifth month in six.
With prices mostly rising since October 2020, some energy firms said they plan to boost spending a bit in 2021 after cutting drilling and completion expenditures over the past two years.
That spending increase, however, remains small as most firms continue to focus on boosting cash flow, reducing debt and increasing shareholder returns rather than adding output.
Oilfield activity in North America is expected to be at levels to maintain existing production, said top oilfield services provider Schlumberger NV Chief Executive Olivier Le Peuch.
Overall, U.S. oil production is expected to ease from 11.3 million barrels per day in 2020 to 11.0 million bpd in 2021 before rising to 11.9 million bpd in 2022, according to government projections. That compares with the all-time annual high of 12.3 million bpd in 2019.