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 Feb. 2.

The oil and gas rig count, an early indicator of future output, fell by two to 619 in the week to Feb. 2. 

The U.S. oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due mostly to a decline in oil and gas prices, higher drilling costs and as companies focused more on paying down debt and boosting shareholder returns rather than increasing output.

Baker Hughes said that puts the total rig count down by 140 rigs, or 18%, below this time last year.

Baker Hughes said U.S. oil rigs held steady at 499 this week, while gas rigs fell by two to 117.

U.S. oil futures CLc1 were up about 1% so far in 2024 after dropping by 11% in 2023. U.S. gas futures NGc1, meanwhile, were down about 18% so far in 2024 after plunging by 44% in 2023.

Fifteen of the independent E&P companies tracked by U.S. financial services firm TD Cowen said they planned to cut spending by around 3% in 2024 versus 2023.

In 2023, 25 of the E&Ps TD Cowen tracks said they planned to raise spending by around 20% versus the prior year after boosting spending about 40% in 2022 and 4% in 2021.

Despite lower prices, spending and rig counts, U.S. oil and gas output was still on track to hit record highs in 2024 and 2025 due to efficiency gains and as firms complete work on already drilled wells.

The total number of drilled but uncompleted (DUC) wells remaining dropped to a record low of 4,374 in December, according to federal energy data going back to December 2013.

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