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 September 2023, energy services firm Baker Hughes BKR.O said in its closely followed report on April 12.
The oil and gas rig count, an early indicator of future output, fell by three to 617 in the week to April 12, the lowest since November.
Baker Hughes said that puts the total rig count down 131, or 18%, below this time last year.
Baker Hughes said oil rigs fell by two to 506 this week, while gas rigs decreased by one to 109, their 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 20% so far in 2024 after dropping by 11% in 2023. U.S. gas futures, meanwhile, were down about 30% so far in 2024 after plunging by 44% in 2023.
Crude oil prices have climbed to their highest this year, but a weak natural gas market, steeper costs and a focus on shareholder returns over new production are keeping shale drillers from big output increases in the world's top oil and gas producer.
U.S. crude outputis forecast to rise from a record 12.9 MMbbl/d in 2023 to 13.2 MMbbl/d in 2024 and 13.7 MMbbl/d in 2025, according to the latest U.S. Energy Information Administration (EIA) outlook.
But the drop in gas prices to a 3-1/2-year low in February and March will cut U.S. gas output to 103.6 Bcf/d in 2024 from a record 103.8 Bcf/d in 2023, according to the EIA, as some producers slash spending and reduce drilling activities.
Recommended Reading
Enbridge Advances Expansion of Permian’s Gray Oak Pipeline
2024-02-13 - In its fourth-quarter earnings call, Enbridge also said the Mainline pipeline system tolling agreement is awaiting regulatory approval from a Canadian regulatory agency.
Canadian Natural Resources Boosting Production in Oil Sands
2024-03-04 - Canadian Natural Resources will increase its quarterly dividend following record production volumes in the quarter.
CorEnergy Infrastructure to Reorganize in Pre-packaged Bankruptcy
2024-02-26 - CorEnergy, coming off a January sale of its MoGas and Omega pipeline and gathering systems, filed for bankruptcy protect after reaching an agreement with most of its debtors.
Bobby Tudor on Capital Access and Oil, Gas Participation in the Energy Transition
2024-04-05 - Bobby Tudor, the founder and CEO of Artemis Energy Partners, says while public companies are generating cash, private equity firms in the upstream business are facing more difficulties raising new funds, in this Hart Energy Exclusive interview.
Genesis Energy Declares Quarterly Dividend
2024-04-11 - Genesis Energy declared a quarterly distribution for the quarter ended March 31 for both common and preferred units.