U.S. energy firms this week cut the number of oil rigs operating for an eighth week in a row, energy services firm Baker Hughes said in its closely followed report on August 4.
The combined oil and natural gas rig count, an early indicator of future output, fell by five to 659 in the week to Aug. 4, the lowest since March 2022.
That was also the 13th time in the last 14 weeks that drillers cut rigs.
Baker Hughes said that puts the total rig count down 105, or 14%, below this time last year.
U.S. oil rigs fell four to 525 this week, dropping for an eighth week in a row to their lowest since March 2022, while gas rigs held steady at 128.
Data provider Enverus, which publishes its own rig count data, said drillers added 13 rigs in the week ended Aug. 2, boosting the total to 724. Nevertheless, the overall count was still down about one rig in the last month and down 16% year-over-year.
U.S. oil futures have rallied over the past six weeks and were now up about 4% so far this year, after gaining about 7% in 2022. U.S. gas futures, meanwhile, have plunged about 43% so far this year after rising about 20% last year.
Despite some plans to lower rig counts, the independent exploration and production companies tracked by 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.
U.S. crude oil production, however, fell to 12.66 million barrels per day in May, the lowest since February,
Energy Information Administration data showed this week, a sign lower prices and a slowdown in drilling activity are finally causing output to peak and turn down.
Despite lower gas prices, production in the U.S. Lower 48 states rose 0.7 billion cubic feet per day (Bcfd) to a record 115.0 Bcfd in May, according to the EIA, topping the prior all-time high of 114.3 Bcfd in April.
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