U.S. energy firms this week cut the number of oil and natural gas rigs operating for a second week in a row, 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 two to 536 in the week to August 29, the lowest since August 2021.
Baker Hughes said this week’s decline puts the total rig count down 47 rigs, or 8.1%, below the total this time last year.
Baker Hughes said oil rigs rose by one to 412 this week, while gas rigs fell by three to 119.
The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past couple of years prompted energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output.
Even though analysts forecast U.S. spot crude prices would decline for a third year in a row in 2025, the U.S. Energy Information Administration projected crude output would rise from a record 13.2 million barrels per day in 2024 to around 13.4 million bpd in 2025.
On the gas side, the EIA projected a 65% increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14% price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020.
The EIA projected gas output would rise to 106.4 billion cubic feet per day in 2025, up from 103.2 bcfd in 2024 and a record 103.6 bcfd in 2023.
(Reporting by Sarah Qureshi in Bengaluru and Scott DiSavino in New York; Editing by Nia Williams)