U.S. energy firms this week cut the number of oil and natural gas rigs operating for the first time in three weeks, energy services firm Baker Hughes said in its closely followed report on Aug. 2.
The oil and gas rig count, an early indicator of future output, fell by three to 586 in the week to Aug. 2.
Baker Hughes said that puts the total rig count down 73, or 11%, below this time last year.
Baker Hughes said oil rigs were steady at 482 this week, while gas rigs fell by three to 98.
In the Denver-Julesburg (D-J)-Niobrara basin in Colorado, Wyoming, Nebraska and Kansas, drillers cut one rig, bringing the total down to nine, the lowest since June 2021.
In the Marcellus Shale in Pennsylvania, West Virginia and Ohio, drillers cut one rig, bringing the total down to 24, the lowest since September 2020.
In the Permian Shale in West Texas and eastern New Mexico, drillers cut one rig, bringing the total down to 303, the lowest since February 2022.
In California, drillers added one rig, bringing the total up to eight, the most since January 2022.
In Colorado, drillers cut one rig, bringing the total down to 13, the lowest since February 2022.
In Texas, drillers cut two rigs, bringing the total down to 274, the lowest since January 2022.
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 2% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures were down about 24% so far in 2024 after plunging by 44% in 2023.
Latest government data showed U.S. crude oil production fell in May in its first monthly decline since January, while natural gas output decreased in the month to its lowest since February 2023.
Meanwhile, Exxon Mobil boosted its profit in the second quarter partly due to volume gains from its purchase this year of shale oil firm Pioneer Natural Resources.
The top U.S. oil producer increased its annual capital expenditure guidance to $28 billion from the previously estimated $23 billion-$25 billion.
The results also showed higher cash flow from operations which will help fund higher share buybacks and dividends. It also plans to buy back $19 billion in shares this year, the largest share repurchase program among its top Western rivals, up from $17.4 billion last year.