U.S. energy firms this week added oil and natural gas rigs for the third time in four weeks, energy services firm Baker Hughes said in its closely followed report on Aug. 9.
The oil and gas rig count, an early indicator of future output, rose by two to 588 in the week to Aug. 9.
Despite this week's rig increase, Baker Hughes said the total count was still down 66 rigs, or 10% below this time last year.
Baker Hughes said oil rigs rose by three to 485 this week, while gas rigs fell by one 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 on paying down debt and boosting shareholder returns instead of raising output.
U.S. oil futures were up about 7% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures were down about 15% so far in 2024 after plunging by 44% in 2023.
That increase in oil prices should encourage drillers to boost U.S. crude output from a record 12.9 MMbbl/d in 2023 to 13.2 MMbbl/d in 2024, 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 prices dropped to 3-1/2-year lows in February and March.
That drilling decline should cause U.S. gas output to slide to 103.3 Bcf/d in 2024, down from a record high of 103.8 Bcf/d in 2023, according to the EIA.