U.S. energy firms this week increased the number of oil rigs operating for the first time since June, while cutting the natural gas rig count, energy services firm Baker Hughes said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, rose by one to 632 in the week to Sept. 8.
Despite this week’s rig increase, Baker Hughes said the total count was still down 127, or 17%, below this time last year.
U.S. oil rigs rose one to 513 this week, while gas rigs fell by one to 113, their lowest since January 2022.
After oil and gas prices soared following Russia’s invasion of Ukraine last year, the U.S. rig count climbed to 784 by November 2022, but has since slumped by about 19% as prices fell earlier in the year.
Oilfield services firm Patterson-UTI’s CEO said this week he expects the U.S. oil and gas rig count to recover to more than 700 by the end of next year as high energy prices boost drilling activity.
U.S. oil futures were up about 9% so far this year after gaining about 7% in 2022. U.S. gas futures, meanwhile, have plunged about 42% so far this year after rising about 20% last year.
Higher prices for oil has put U.S. crude production back on track this year to set a peak not seen since the COVID-19 pandemic, while another record high was forecast for gas production in 2023 despite the sharp slump in prices.
That rise in gas output is due primarily to increased interest in oil drilling in shale basins that also produce a lot of associated gas like the Permian in West Texas and eastern New Mexico.
Chevron said this week that it plans to raise capital expenditures in the Permian by 25% in 2024 from its annual guidance, and aims for record output despite a more modest rig count plan for the largest U.S. oilfield.
The No. 2 U.S. oil producer expects to average 13 to 14 company-operated rigs in 2024 in the basin, up from 2022 but fewer than previously anticipated.
(Reporting by Scott DiSavino Editing by Marguerita Choy)