U.S. energy firms this month cut the most oil and natural gas operating since August, even as the rig count remained unchanged this week, energy services firm Baker Hughes said in its closely followed report on May 30.
The oil and gas rig count, an early indicator of future output, held steady at 600 in the week to May 31.
Baker Hughes said that puts the total rig count down 96 rigs, or 14%, below this time last year.
Baker Hughes said oil rigs fell by one to 496, while gas rigs rose by one to 100.
In May, the total oil and gas rig count fell for the third month in a row and dropped by 13, the most in a month since August.
The number of oil rigs active in May fell by 10, its first monthly decline since January and the biggest monthly cut since September.
The number of gas rigs operating declined by five in May, the first time it fell for three straight months since July 2020.
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 8% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures were up about 2% so far in 2024 after plunging by 44% in 2023.
Reflecting the price impact on drilling, U.S. crude oil production rose in March to its highest this year, while natural gas production, which hit a peak in December, fell in the month, data from the Energy Information Administration showed on May 31.