By Scott DiSavino
(Reuters) – U.S. energy companies this week kept the number of oil and drilling rigs unchanged for the second week in a row, energy services company Baker Hughes (NASDAQ:) said in its closely watched report on Friday.
The number of oil and gas platforms, an early indicator of future production, remained at 589 in the week to December 20.
Baker Hughes said that brings the total number of rigs down to 31 rigs, or 5% fewer than this time last year.
Baker Hughes said the number of oil rigs increased by one to 483, while the number of natural gas platforms fell by one to 102. The number of oil rigs was the highest since September.
The number of oil and gas platforms fell by approximately 20% in 2023, after increasing by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs due to rising inflation and as companies focused on paying back oil and gas extraction. debt and increasing shareholder returns instead of increasing production.
US oil futures are unchanged after Baker Hughes’ data, dropping around 3% for the year to date after falling 11% in 2023. U.S. gas futures are up about 49% so far in 2024, after falling 44% in 2023. .
The 25 independent exploration and production (E&P) companies tracked by U.S. financial services firm TD Cowen said, on average, E&Ps planned to leave spending in 2024 roughly unchanged from 2023.
This compares with annual spending increases of 27% in 2023, 40% in 2022 and 4% in 2021.
According to the latest outlook from the US Energy Information Administration (EIA), production was on track to rise from a record 12.9 million barrels per day (bpd) in 2023 to 13.2 million bpd in 2024 and 13 .5 million barrels per day by 2025.
On the gas side, several producers have scaled back drilling this year after monthly average spot prices on the U.S. Henry Hub benchmark in Louisiana fell to a 32-year low in March and then remained relatively low for months.
That reduction in drilling activity should help U.S. gas production drop for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020.
EIA forecast gas production would fall to 103.2 billion cubic feet per day (bcfd) in 2024, down from a record high of 103.8 bcfd in 2023.