U.S. energy firms this week cut the number of oil and natural gas rigs operating for a second week in a row, to the lowest since January 2022, energy services firm Baker Hughes said in its closely followed report on May 3.

The oil and gas rig count, an early indicator of future output, fell by eight to 605 in the week to May 3, in the biggest weekly decline since September 2023. 

Baker Hughes said that puts the total rig count down 143, or 19% below this time last year.

Baker Hughes said oil rigs fell seven to 499 this week, in the biggest weekly drop since November 2023. The number of gas rigs declined by three to 102, their December 2021.

The oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused on paying down debt and boosting shareholder returns instead of raising output.

U.S. oil futures were up about 9% so far in 2024 after dropping by 11% in 2023. U.S. gas futures, meanwhile, were down about 15% so far in 2024 after plunging by 44% in 2023.

The 28 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.

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

Following its acquisition of Callon Petroleum, APA plans to invest $2.7 billion in upstream oil and gas, a rise from previous spending plans of about $2 billion in 2024. It expects to average about 10 rigs for the remainder of the year in the U.S.

It boosted its full year production forecast, despite lowering production in the first quarter. Gas producers, such as APA, with high exposure to declining prices, had resorted to curtailing production and reduce spending to offset the price fall.