U.S. energy firms this week cut oil and natural gas rigs for the second time in three weeks, energy services firm Baker Hughes said in its closely followed report on Aug. 16.
The oil and gas rig count, an early indicator of future output, fell by two to 586 in the week to Aug. 16.
Baker Hughes said that puts the total rig count down 56, or 8.7% below this time last year.
Baker Hughes said oil rigs fell by two to 483 this week, while gas rigs rose by one to 98.
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 7.1% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures were down about 14% so far in 2024 after plunging by 44% in 2023.
U.S. shale firms continue to grow production using fewer rigs by focusing on improved drilling and fracking efficiency. Producers are extending wells to as much as three miles, squeezing more wells onto a single drilling pad and fracking several wells at once.
Ultra-high pressure oil wells are getting more focus from oil majors with deployment of new technology and drill ships able to cope safely with the enormous forces involved. Exploiting deep sea wells with extreme pressures could enable recovery of an extra 2 Bbbl from the U.S. Gulf of Mexico.