U.S. energy firms this week operated the same number of oil and natural gas rigs for third week in a row, energy services firm Baker Hughes said in its closely followed report on Dec. 27.

The oil and gas rig count, an early indicator of future output, was unchanged at 589 in the week to Dec. 27. 

Baker Hughes said that puts the total rig count down 33 rigs, or 5.3% below this time last year.

Baker Hughes reported that the number of oil rigs and gas rigs remained steady this week, holding at 483 rigs and 102 rigs, respectively.

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 2% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures were up about 43% so far in 2024 after plunging by 44% in 2023.

For the year, the total oil and gas rig count was down for a second year in a row for the first time since 2020.

U.S. crude output was on track to rise from a record 12.9 MMbbl/d in 2023 to 13.2 MMbbl/d in 2024 and 13.5 MMbbl/d in 2025, according to the latest U.S. Energy Information Administration (EIA) outlook.

On the gas side, several producers reduced drilling activities this year after monthly average spot prices at the U.S. Henry Hub benchmark in Louisiana plunged to a 32-year low in March, and remained relatively low for months after that.

That reduction in drilling activity should cause U.S. gas output to decline for the first time since the COVID-19 pandemic cut demand for the fuel in 2020.

EIA projected gas output would slide to 103.2 Bcf/d in 2024, down from a record high of 103.8 Bcf/d in 2023.

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