US energy firms last week cut the number of oil and natural gas rigs operating for a third week in a row for the first time since late June, energy services firm Baker Hughes said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, fell by two to 583 in the week to August 30, to their lowest since June.
Baker Hughes said that puts the total rig count down 48, or 8 per cent below this time last year.
Baker Hughes said oil rigs were unchanged at 483 this week, while gas rigs fell by two to 95, their lowest since April 2021.
For the month, the total oil and gas rig count was down six after rising by eight last month.
Oil rigs were up one in August, while gas rigs were down six for the month.
In the Marcellus shale in Pennsylvania, Ohio and West Virginia, the nation’s biggest gas-producing basin, drillers cut two rigs, bringing the total down to 23, the lowest since August 2016.
In Pennsylvania, meanwhile, drillers cut three rigs, bringing the total down to 18, the lowest since December 2021.
The oil and gas rig count dropped about 20 per cent in 2023 after rising by 33 per cent in 2022 and 67 per cent in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused on paying down debt and boosting shareholder returns instead of raising output.
US oil futures were up about 3 per cent so far in 2024 after dropping by 11 per cent in 2023, while US gas futures were down about 16 per cent so far in 2024 after plunging by 44 per cent in 2023.
Even though oil prices were up so far this year, the drop in gas futures for a second year in a row prompted many energy firms to cut capital spending in 2024. That drop in spending was expected to reduce gas production in 2024 for the first time since 2020.
The 26 independent exploration and production (E&P) companies tracked by US financial services firm TD Cowen said they planned to cut spending by around 2 per cent in 2024 versus 2023.
That compares with year-over-year spending increases of 27 per cent in 2023, 40 per cent in 2022 and 4 per cent in 2021.