U.S. energy firms this week reduced the number of oil rigs operating for a sixth consecutive week as producers cut spending on new drilling and completions leading to lower production growth forecasts.

Drillers cut six oil rigs in the week to Aug. 9, bringing down the total count to 764, the lowest since February 2018, Baker Hughes, a GE company, said in its weekly report. That is the most weekly declines in a row since March when drillers also cut rigs for six consecutive weeks.

In the same week a year ago, there were 869 active rigs.

The oil rig count, an early indicator of future output, has declined over the past eight months as independent E&P companies cut spending on new drilling as they focus more on earnings growth instead of increased output.

Pioneer Natural Resources, one of the largest U.S. independent oil producers, on Aug. 7 warned that the shale boom could end by 2025 in all but one area of the Permian Basin, the country’s largest shale field, as oil prices remain low and many producers pull back on drilling.

The U.S. Energy Information Administration (EIA) this month lowered its projected total U.S. crude output to 12.27 million barrels per day (MMbbl/d) this year. In 2018, production hit a record high 10.99 MMbbl/d.

U.S. crude futures traded above $54 per barrel on Aug. 9, putting the contract on track to fall about 2% for the week on a report from the International Energy Agency that projected demand would grow by its least since the financial crisis of 2008.

Looking ahead, U.S. crude futures were trading around $54 per barrel for the balance of 2019 and $52 in calendar 2020.

U.S. financial services firm Cowen & Co. this week said that projections from the E&P companies it tracks point to a 5% decline in capex for drilling and completions in 2019 versus 2018.

Cowen said independent producers expect to spend about 11% less in 2019, while major oil companies plan to spend about 16% more.

In total, Cowen said all of the E&P companies it tracks that have reported plan to spend about $81.0 billion in 2019 versus $85.4 billion in 2018.

Year-to-date, the total number of oil and gas rigs active in the United States has averaged 1,004. Most rigs produce both oil and gas.

Analysts at Simmons & Co., energy specialists at U.S. investment bank Piper Jaffray, have forecast the average combined oil and gas rig count will slide from a four-year high of 1,032 in 2018 to 970 in 2019 and 955 in 2020 before rising to 997 in 2021.

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