US drillers cut oil and gas rigs for first time in four weeks, Baker Hughes says
U.S. energy firms reduced oil and gas rigs for the first time in four weeks, according to Baker Hughes. Oil rigs dropped to their lowest since September 2021, while gas rigs rose to their highest since July 2023. The decline in rig count is linked to lower oil and gas prices and a focus on shareholder returns. Despite forecasts of declining crude prices, the EIA projects increased crude and gas output in 2025.
Oil rigs fall to lowest since September 2021
Gas rigs rise to highest since July 2023
Past rig count declines linked to lower oil and gas prices, focus on shareholder returns
EIA projects rise in crude and gas output in 2025
NEW YORK, Nov 26 (Reuters) - U.S. energy firms this week cut the number of oil and natural gas rigs operating for the first time in four weeks, energy services firm Baker Hughes (BKR.O) said in its closely followed report on Wednesday. The oil and gas rig count, an early indicator of future output, fell by 10 to 544 in the week to November 26, the lowest since September. (BHGUSWTT) (BHGUSOILDRLW) (BHGUSGASDRLW) Baker Hughes, which usually releases its North American rig count on Friday, issued this report a couple of days early due to the U.S. Thanksgiving Day holiday on Thursday. Baker Hughes said oil rigs fell by 12 to 407 this week, their lowest since September 2021, while gas rigs rose by 3 to 130, their highest since July 2023.
The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil (CLc1) and gas (NGc1) prices over the past couple of years prompted energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output. Even though analysts forecast U.S. spot crude prices would decline for a third year in a row in 2025, the U.S. Energy Information Administration (EIA) projected crude output would 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, EIA projected a 58% increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14% price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020. (NGAS/POLL) EIA projected gas output would rise to 107.7 billion cubic feet per day (bcfd) in 2025, up from 103.2 bcfd in 2024 and a record 103.6 bcfd in 2023.
