U.S. Energy Firms Cut Oil and Gas Rigs for Second Week
U.S. energy firms have cut the number of oil and gas rigs operating for a second week in a row, bringing the total rig count to the lowest since December 2021, according to a report from Baker Hughes. The oil and gas rig count, an early indicator of future output, fell by four to 580 in the week to January 17.
The number of oil rigs fell by two to 478, the lowest since November, while gas rigs also fell by two to 98, the lowest since September. Drillers in the Haynesville shale in Arkansas, Louisiana, and Texas cut two rigs, bringing the total down to 29, the lowest since January 2017. In the Williston basin in Montana and North Dakota, drillers cut four rigs, bringing the total down to 33, the lowest since January 2024.
The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices prompted energy firms to focus more on paying down debt and boosting shareholder returns rather than raising output. Despite forecasted declines in U.S. spot crude prices in 2025, the U.S. Energy Information Administration (EIA) projects that crude output will rise from a record 13.2 million barrels per day (bpd) in 2024 to around 13.6 million bpd in 2025.
On the gas side, the EIA projects a 43% increase in spot gas prices in 2025 will prompt producers to boost drilling activity this year, following a 14% price drop in 2024. Gas output is expected to rise to 104.5 billion cubic feet per day (bcfd) in 2025, up from 103.1 bcfd in 2024 and a record 103.6 bcfd in 2023.