U.S. energy firms this week added oil and natural gas rigs for the first time in five weeks in the biggest weekly rise in a year, energy services firm Baker Hughes said in its closely followed report on Sept. 13.
The oil and gas rig count, an early indicator of future output, rose by eight in the week to Sept. 13 to 590, returning to mid-June levels. The increase was the biggest since the week to Sept. 15, 2023.
Despite this week's rig increase, Baker Hughes said the total count was still down 51 rigs, or 8%, below this time last year.
Baker Hughes said oil rigs rose by five to 488 this week, while gas rigs rose by three to 97.
The 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 than raising output.
U.S. oil futures were down about 3% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures were down about 7.5% so far in 2024 after plunging by 44% in 2023.
Despite the decrease in oil prices, drillers were still on track to boost U.S. crude output from a record 12.9 MMbbl/d in 2023 to 13.3 million bpd in 2024 and 13.7 MMbbl/d 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 this year after spot prices at the U.S. Henry Hub benchmark in Louisiana plunged to a 25-year low in March.
That drilling decline should cause U.S. gas output to slide to 103.4 Bcf/d in 2024, down from a record high of 103.8 Bcf/d in 2023, according to the EIA.