U.S. energy firms this week cut the number of oil and natural gas rigs operating for the 12th time in 13 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 two to 542 in the week to July 25.
Baker Hughes said this week’s decline puts the total rig count down 47 rigs, or 8% below this time last year.
Baker Hughes said oil rigs fell by seven to 415 this week, their lowest since September 2021, while gas rigs rose by five to 122, their highest since August 2023.
In July, the combined rig count fell for a fifth consecutive month.
In Texas, the biggest oil and gas-producing state, the rig count fell by four to 249, the lowest since October 2021.
In Alaska, the rig count fell by one to nine, the lowest since July 2024.
In the Permian basin in West Texas and eastern New Mexico, the biggest U.S. oil-producing shale formation, the rig count fell by three to 260, the lowest since September 2021.
In the Eagle Ford shale in South Texas, the rig count fell by two to 39, the lowest since October 2021.
Baker Hughes this week joined its U.S. rivals Halliburton and SLB in warning of a slowdown in upstream activity and spending as weak and volatile oil prices have led producers to curb capital spending and drilling.
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 (EIA) projected crude output would rise from a record 13.2 million barrels per day (bpd) in 2024 to around 13.4 million bpd in 2025.
On the gas side, the EIA projected a 68% 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 105.9 billion cubic feet per day (bcfd) in 2025, up from 103.2 bcfd in 2024 and a record 103.6 bcfd in 2023.
(Reporting by Scott DiSavino Editing by Marguerita Choy)