U.S. energy firms this week cut seven oil and natural gas rigs in their biggest weekly decline since September 2021, energy services firm Baker Hughes Co said in its closely followed report on Friday.
The U.S. oil and gas rig count, an early indicator of future output, fell by seven to 772 in the week to Jan. 6, the lowest since November.
U.S. oil rigs fell three to 618 this week, their lowest since November, while gas rigs dropped by four to 152, their lowest since June.
U.S. oil futures were down about 7% this week in their worst start to the year since 2016. It had gained about 7% in 2022.
The shale oil patch closed the door on
a disappointing year
while bracing for weaker output gains in 2023, hamstrung by rising costs, dwindling reserves and pressures to hold down spending.
U.S. oil production last year was forecast to have risen by an average of 620,000 barrels per day, according to the latest government estimates, a third less than the roughly 1 million bpd some forecasts called for at the start of the year. That shortfall has undercut shale’s influence on global markets and helped lift prices for the second year in a row.