U.S. energy firms this week added oil and natural gas rigs for a second week in a row for the first time since November, energy services firm Baker Hughes Co said in its closely followed report on March 24.
The oil and gas rig count, an early indicator of future output, rose four to 758 in the week to March 24. Baker Hughes said that puts the total rig count up 88, or 13%, over this time last year.
U.S. oil rigs rose four to 593 this week, up for the first time in six weeks, while gas rigs held steady at 162.
U.S. oil futures were down about 14% so far this year after gaining about 7% in 2022. U.S. gas futures, meanwhile, have plunged about 51% so far this year after rising about 20% last year.
Energy analysts said those energy price declines have already caused several exploration and production companies to cut back on the number of rigs they use to drill for oil and gas for three months in a row from December-February.
"Such a drastic movement in prices on the back of already elevated well costs – which have risen by about 30% since 2021 – will cause a slowdown in drilling and completions activity in U.S. onshore natural gas basins, according to analysts at energy consulting firm Rystad Energy.
Even though the gas rig count was currently up since the start of the year, analysts said drillers have been cutting rigs in some shale basins, especially the Haynesville in Arkansas, Louisiana and Texas due to its higher production costs.
There have been 67 rigs active in the Haynesville over the past four weeks, down from 72 at the end of 2022.