U.S. energy firms this week cut the number of oil and natural gas rigs operating for the first time in three weeks, 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, fell by seven to 622 in the week to March 8, the lowest since Feb. 16.
Baker Hughes said that puts the total rig count down 124 rigs, or 16.6%, below this time last year.
Baker Hughes said U.S. oil rigs fell two to 504 this week, their lowest since Feb. 23, while gas fell four to 115, their biggest drop since November.
The U.S. oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused more on paying down debt and boosting shareholder returns instead of raising output.
U.S. oil futures were up about 9% so far in 2024 after dropping by 11% in 2023. U.S. gas futures, meanwhile, were down over 27% so far in 2024 after plunging by 44% in 2023.
U.S. natural gas output fell about 7% over the past month as producers scaled back production following a collapse in prices to a 3-1/2-year low.
Gas output in the U.S. Lower 48 states fell to an average of 100.2 billion cubic feet per day (bcfd) so far in March, down from 104.1 bcfd in February, according to financial company LSEG this week. That compares with a monthly record of 105.5 bcfd in December 2023.
(Reporting by Scott DiSavino in New York and Ashitha Shivaprasad in Bengaluru Editing by Marguerita Choy)