U.S. energy firms this week added oil and natural gas rigs for the first time in four 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, rose by one to 586 in the week to Oct. 11.
Baker Hughes said the total count was still down 36 rigs or 6% from this time last year.
Baker Hughes said oil rigs rose by two to 481 this week. Gas rigs fell by one to 101.
In Pennsylvania, meanwhile, drillers cut two rigs, bringing the state’s total down to 13, the lowest since July 2016.
The oil and gas rig count dropped about 20% in 2023, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused on paying down debt and boosting shareholder returns instead of raising output. The rig count rose by 33% in 2022 and 67% in 2021.
U.S. oil futures were up about 5% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures were up about 5% so far in 2024 after plunging by 44% in 2023.
Higher oil prices should prompt drillers to boost U.S. crude output from a record 12.9 million barrels per day (bpd) in 2023 to 13.2 million bpd in 2024 and 13.5 million bpd in 2025, according to the latest U.S. Energy Information Administration (EIA) outlook.
On the gas side, several producers reduced spending on drilling activities earlier in the year after monthly average spot prices at the U.S. Henry Hub benchmark in Louisiana plunged to a 32-year low in March.
That drilling decline should cause U.S. gas output to slide to 103.5 billion cubic feet per day (bcfd) in 2024, down from a record high of 103.8 bcfd in 2023, according to the EIA.
(Reporting by Scott DiSavino; Editing by David Gregorio)