U.S. energy firms this week cut the number of oil and natural gas rigs operating for a ninth week in a row for the first time since July 2020, energy services firm Baker Hughes Co. said in its closely followed report on June 30.
The oil and gas rig count, an early indicator of future output, fell by 8 to 674 in the week to June 30, the lowest since April 2022.
Baker Hughes said that puts the total rig count down 76 rigs, or 10%, below this time last year.
U.S. oil rigs fell by one to 545 this week, their lowest since April 2022, while gas rigs fell 6 to 124, their lowest since February 2022.
For the month, the total oil and gas count fell by 37 rigs in June after dropping 44 in May. That put the total count down for a second month in a row for the first time since February.
For the quarter, the total oil and gas count fell by 81 rigs, the most since dropping by 463 in the second quarter of 2020.
Data provider Enverus, which publishes its own rig count data, said drillers cut four rigs in the week to June 28, reducing the overall count to 736. That put the total count down about 18 rigs in the last month and down 13% year-over-year.
U.S. oil futures were down about 12% so far this year after gaining about 7% in 2022. U.S. gas futures, meanwhile, have plunged about 37% so far this year after rising about 20% last year.
The massive drop in gas prices has already caused some exploration and production companies, including Chesapeake Energy Corp, Southwestern Energy Co and Comstock Resources Inc, to announce plans to reduce production by cutting some rigs—especially in the Haynesville shale in Arkansas, Louisiana and Texas.
Despite some plans to lower rig counts, the independent exploration and production companies tracked by U.S. financial services firm TD Cowen were on track to boost spending by about 19% in 2023 versus 2022 after increasing spending about 40% in 2022 and 4% in 2021.
That increased spending will help keep U.S. crude production on track to rise from 11.9 million barrels per day (bbl/d) in 2022 to 12.6 million bbl/d in 2023 and 12.8 million bbl/d in 2024, according to projections from the U.S. Energy Information Administration (EIA) in June. That compares with a record 12.3 million bbl/d in 2019.
U.S. gas production, meanwhile, was on track to rise from a record 98.13 billion cubic feet per day (Bcf/d) in 2022 to 102.74 Bcf/d in 2023 and 103.04 Bcf/d in 2024, according to EIA's projection.
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