By Scott Disavino
(Reuters) – U.S. energy companies this week cut the number of oil and natural gas rigs operating for a third straight week to the lowest since December 2021, energy services firm Baker Hughes said in a closely watched report on Friday.
The oil and gas count, an early indicator of future production, fell by four to 576 in the week to January 24.
Baker Hughes said this week’s decline cuts the total plant count by 45, or 7% below this time last year.
Baker Hughes said oil rigs fell six this week to 472, the lowest since December 2021, while gas rigs rose one to 99.
In the Permian Basin in west Texas and eastern New Mexico, the nation’s largest oil shale basin, the rig count fell by six in the week to 298, the lowest since February 2022.
That six-rig drop in Permian was the biggest weekly drop since August 2023.
Oil and gas numbers are down by about 5% in 2024 and 20% in 2023, as lower oil and gas prices in recent years have encouraged energy companies to focus more on paying down debt and increasing shareholder returns rather than increase in production.
Although analysts forecast crude oil prices could fall for a third straight year in 2025, the US Energy Information Administration (EIA) projected crude oil production to rise from a record 13.2 million barrels per day (BPD) to about 13.6 million to about 13.6 million to about 13.6 million to about 13.6 million BPD in 2025.
On the gas side, the EIA projected an increase in spot gas prices in 2025 would encourage producers to increase drilling activity this year after a 14% drop in prices in 2024 caused several energy companies to cut production for the first time since the covid-19 pandemic. reduced demand for fuel in 2020. [NGAS/POLL]
EIA projected gas production will rise to 104.5 billion cubic meters per day (BCFD) in 2025, up from 103.1 BCFD in 2024 and a record 103.6 BCFD in 2023.
(Reporting by Scott Disavin; Editing by Marguerita Choy)
