U.S. energy firms cut the most oil and natural gas rigs in a week since February, energy services firm Baker Hughes Co said in its closely followed report on May 5.

The oil and gas rig count, an early indicator of future output, fell by seven to 748 in the week to May 5. 

Despite this week's rig decline, Baker Hughes said the total count was still up 43 rigs, or 6%, over this time last year.

Oil rigs fell by three to 588 this week, in their biggest weekly decline since March. Gas rigs fell by four to 157, their biggest weekly decline since February.

U.S. oil futures were down about 11% so far this year after gaining about 7% in 2022. U.S. gas futures, meanwhile, have plunged about 52% so far this year after rising about 20% last year.

U.S. oil and gas production grew rapidly in the first two months of 2023 – a delayed response to the high prices and upturn in drilling that characterized much of last year following Russia’s invasion of Ukraine.

But growth is set to decelerate sharply as the more recent slump in prices curtails new drilling and well completions, with the impact evident by the fourth quarter of 2023.

This week, Chesapeake Energy Corp., EOG Resources and APA Corp. said they could delay some well completions or ramp down drilling due to weak prices.

Shale producer Diamondback Energy, however, noted rig prices are falling and steel costs are set to decline by about $20 per foot-$25 per foot, a sign the inflationary pressures that plagued the oilfield in the past year are easing.