U.S. energy firms this week added oil and natural gas rigs for a second straight week to their highest since September, energy services firm Baker Hughes said in its closely followed report on March 1.

The oil and gas rig count, an early indicator of future output, rose by three to 629 in the week to March 1, its highest since the week ending Sept. 22. 

Despite this week's rig increase, Baker Hughes said the total count was still down 120 rigs, or 16% below this time last year.

Baker Hughes said oil rigs rose three to 506 this week, also their highest since September, while gas rigs fell by one to 119.

In 2023, the U.S. oil and gas rig count dropped about 20% 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 more on paying down debt and boosting shareholder returns instead of raising output.

U.S. oil futures were up over 11% so far in 2024 after dropping by 11% in 2023. U.S. gas futures, meanwhile, were down about 27% so far in 2024 after plunging by 44% in 2023.

U.S. crude oil production in December fell to 13.315 MMbbl/d, a slight decline from November's record 13.319 MMbbl/d, the latest data from the Energy Information Administration showed on Feb. 29.

Gross natural gas production in the U.S. Lower 48 states jumped about 0.2% to a record 118.2 Bcf/d in December, up from the previous record of 118 Bcf/d in November, the EIA said.

Despite the decline in rig count, there was no comparable downturn in output as drillers boosted efficiency by concentrating on only the most promising sites and crews streamlined the drilling process.

Twenty eight of the independent exploration and production (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.

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