U.S. energy firms this week cut the number of oil and natural gas rigs operating for the first time in three weeks, energy services firm Baker Hughes said in its closely followed report on May 2.

The oil and gas rig count, an early indicator of future output, fell by three to 584 in the week to May 2. 

Baker Hughes said this week's decline puts the total rig count down 21 rigs, or 3% below this time last year.

Baker Hughes said oil rigs fell by four to 479 this week, while gas rigs rose by two to 101.

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.

Crude prices have slumped 20% to COVID-19 pandemic lows in the first 100 days of U.S. President Donald Trump's second term amid tariff turmoil, raising questions about whether producers will meet their goals for paying dividends and repurchasing shares—a cornerstone of Big Oil's strategy to woo investors - or cut capital expenditure budgets.

Exxon Mobil on May 2 reiterated its previous guidance of spending between $27 billion and $29 billion in 2025. CEO Darren Woods said despite pressure from short-term investors to cut expenditures and return more money to shareholders, the top U.S. oil producer will continue investing to maintain its position.

Chevron similarly said it is maintaining its dividend and share buyback strategy. The No. 2 U.S. oil producer grew output in the first quarter from the Permian Basin, the top U.S. oilfield, by 12% year-over-year.

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