U.S. energy firms this week cut the number of oil and natural gas rigs operating for a seventh week in a row to the lowest since November 2021, energy services firm Baker Hughes said in its closely followed report on June 13.

The oil and gas rig count, an early indicator of future output, fell by four to 555 in the week to June 13. 

Baker Hughes said this week's decline puts the total rig count down by 35 rigs or 6% below this time last year.

The oil rig count fell by three to 439 this week, its lowest since October 2021, while gas rigs slipped by one to 113.

The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past couple of years prompted energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output.

The independent E&P companies tracked by U.S. financial services firm TD Cowen said they planned to cut capital expenditures by around 3% in 2025 from levels seen in 2024.

That compares with roughly flat year-over-year spending in 2024, and increases of 27% in 2023, 40% in 2022 and 4% in 2021.

Even though analysts forecast U.S. spot crude prices would decline for a third year in a row in 2025, the U.S. Energy Information Administration (EIA) projected crude output would rise from a record 13.2 MMbbl/d in 2024 to around 13.4 MMbbl/d in 2025.

On the gas side, the EIA projected an 84% increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14% price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020. 

The EIA projected gas output would rise to 105.9 Bcf/d in 2025, up from 103.2 Bcf/d in 2024 and a record 103.6 Bcf/d in 2023.

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