U.S. oil firms reduced oil rigs the most in this week since September. This resulted in a decrease in the total oil and natural gas count for a second consecutive week, as crude oil prices remain negative for the year.
Baker Hughes stated that despite this week’s rig drop, the total count was still up by 197 or 34% over last year.
U.S. oil production fell to 620 this week, which is its lowest level in six weeks. However, gas production rose to 154.
U.S. crude oil futures fell by 1% this year, after rising 55% in 2021.
The Permian Shale Basin, America’s largest oilfield, will produce an unprecedented 5.6 million barrels per day (bpd), in January. However, this increase is only a third of September’s.
According to data, U.S. shale production is expected to record 9.3 Million bpd in January. This is only 94,000.
As many of the biggest companies warn of overworked fields and less productive new wells in the oilfields, gains have slowed. Many companies are more focused on paying down debt and returning money to investors than on increasing output.
Although several energy companies have increased spending in 2022 for the second consecutive year, analysts pointed out that they did not use this money to increase production. Instead, they spent more money on labour and equipment due to rising inflation and disruptions in supply.
According to federal energy data, U.S. crude oil production was expected to increase from 11.25 million barrels per day (bpd), in 2021, to 11.87 million BPD in 2022 and 12.34 Million BPD in 2023. This compares to a record 12.32 million bpd in 2019.
