U.S. energy firms this week cut the number of oil and natural gas rigs operating for a fourth week in a row for the first time since late June, energy services firm Baker Hughes said in its closely followed report on Sept. 9.
The oil and gas rig count, an early indicator of future output, fell by one to 582 in the week to Sept. 6, the lowest since June.
Baker Hughes said oil rigs held at 483 this week, while gas rigs fell by one to 94, their lowest since April 2021.
In the Denver-Julesburg (DJ)-Niobrara basin in Colorado, Wyoming, Nebraska and Kansas, drillers cut one rig, bringing the total down to eight, the lowest since June 2021.
In Pennsylvania, meanwhile, drillers cut two rigs, bringing the total down to 16, the lowest since June 2021.
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 down about 6% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures were down about 10% so far in 2024 after plunging by 44% in 2023.
The drop in gas futures for a second year in a row prompted many energy firms to cut capital spending in 2024. That drop in spending was expected to reduce gas production in 2024 for the first time since 2020.The 26 independent exploration and production (E&P) companies tracked by U.S. financial services firm TD Cowen said they planned to cut spending by around 2% in 2024 versus 2023.
That compares with year-over-year spending increases of 27% in 2023, 40% in 2022 and 4% in 2021.