U.S. energy firms this week added oil and natural gas rigs for a second week in a row for the first time since early December, 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 621 in the week to Jan. 26.
Despite this week’s rig increase, Baker Hughes said the total count was 150, or 19%, below this time last year.
Baker Hughes said oil rigs rose by two to 499 this week, while gas rigs fell by one to 119.
The U.S. oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due mostly to a decline in oil and gas prices, higher drilling costs and as companies cut spending in favor of paying down debt and boosting returns to shareholders.
U.S. crude futures were up about 7% so far in 2024 after dropping by 11% in 2023. U.S. gas futures, meanwhile, were up about 4% so far in 2024 after plunging by 44% in 2023.
Fourteen of the independent exploration and production (E&P) companies tracked by U.S. financial services firm TD Cowen said they planned to cut spending by around 3% in 2024 versus 2023.
In 2023, 25 of the E&Ps TD Cowen tracks said they planned to raise spending by around 21% versus the prior year after boosting spending about 40% in 2022 and 4% in 2021.
Despite lower prices, spending and rig counts, oil and gas output was still on track to hit record highs in 2024 and 2025 due to efficiency gains and as firms complete work on already drilled wells.
The total number of drilled but uncompleted (DUC) wells remaining dropped to a record low of 4,374 in December, according to federal energy data going back to December 2013.
(Reporting by Scott DiSavino Editing by Marguerita Choy)