According to a closely followed report released by energy services firm Baker Hughes Co (BKR.O) on Friday, the number of oil and natural gas rigs in the United States was reduced by energy firms this week.
This marks the first quarterly count drop since 2020. The count, which serves as an early indicator of future output, decreased by three to 755 in the week ending on March 31st.
Despite the decline in rigs this week, Baker Hughes reported that the overall count is still up by 82 rigs or 12%, compared to the same period last year.
The number of U.S. oil rigs decreased by one to 592 this week, while gas rigs decreased by two to 160. In terms of the monthly count, the total oil and gas rig count increased by two rigs, marking the first monthly increase since November.
However, over the quarter, the total oil and gas rig count experienced a decline of 24 rigs, which represents the first quarterly decrease since the third quarter of 2020.
In the year so far, U.S. oil futures have decreased by approximately 6%, despite experiencing a gain of around 7% in 2022. Conversely, U.S. gas futures have plummeted by about 51% in 2023, after rising approximately 20% last year.
Several exploration and production companies, including Chesapeake Energy Corp (CHK.O), Southwestern Energy Co (SWN.N), and Comstock Resources Inc (CRK.N), have announced their plans to reduce production by cutting some gas rigs in response to the drop in gas prices.
On the other hand, Energy Information Administration (EIA) data showed that U.S. field production of crude oil reached 12.46 million barrels per day (bpd) in January, the highest level since March 2020.
The EIA also reported that gross natural gas production in the U.S. Lower 48 states increased by 2.9 billion cubic feet per day (bcfd) to 112.3 bcfd in January, the highest level since hitting a record 112.4 bcfd in November 2022.
