(Reuters) – U.S. energy companies cut the number of oil and gas rigs this week for the second consecutive week for the first time since August, energy services company Baker Hughes said in a close report on Friday.
The number of oil and gas drilling rigs, an early indicator of future production, fell by six to 542 in the week ending December 19, the lowest level since September.
Baker Hughes said the number of oil rigs this week fell by eight to 406, the lowest level since September 2021, but gas rigs remained at 127 and other rigs increased by two to nine.
In the Permian Basin of western Texas and eastern New Mexico, the largest oil-producing shale formation in the United States, the number of rigs in operation fell by three this week to 246, the lowest level since August 2021.
The decline in U.S. oil and gas prices over the past few years has caused the number of oil and gas rigs to decline by about 5% in 2024 and 20% in 2023, as energy companies focus on increasing shareholder returns and paying off debt rather than increasing production.
Although analysts predict that U.S. spot crude oil prices will fall for the third consecutive year in 2025, the U.S. Energy Information Administration (EIA) predicts that crude oil production will increase from a record 13.2 million barrels per day (bpd) in 2024 to about 13.6 million barrels per day (bpd) in 2025.
On the gas side, the EIA predicted spot gas prices would rise 63% in 2025 and producers would ramp up drilling activity this year, after falling 14% in 2024 and prompting production cuts for the first time since the coronavirus pandemic reduced demand for the fuel in 2020.
EIA projects gas production to increase to 107.7 billion cubic feet per day (bcfd) in 2025, from 103.2 bcfd in 2024 and a record high of 103.6 bcfd in 2023.
Report by Scott DiSavino. Editing: David Gregorio
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