This week, U.S. energy companies reduced the count of active oil and natural gas rigs to the smallest number since February 2022, as reported by energy services company Baker Hughes in its widely monitored weekly release.
As of November 3, the count of oil and gas rigs, which serves as a preliminary gauge of future production levels, dropped by 7 to a total of 618, marking the lowest count since February of the previous year. Baker Hughes noted this represents a decrease of 152 rigs, or 20%, compared to the same period last year.
The number of operational oil rigs decreased by 8 to 496 this week, hitting the lowest point since January 2022, while the count of natural gas rigs saw a slight increase of 1, reaching 118.
Focusing on North Dakota, the locus of the Bakken shale formation, drillers there have reduced the rig count by one, resulting in a state total of 29 rigs, the smallest count since January 2022. So far this year, U.S. oil futures have remained stable, maintaining the approximately 7% gain achieved in 2022. Conversely, U.S. natural gas futures have seen a significant drop of about 21% after having increased around 20% in the previous year.
According to projections by the U.S. Energy Information Administration (EIA) in October, U.S. crude oil production is expected to climb from 11.9 million barrels per day (bpd) in 2022 to 12.9 million bpd in 2023, and further to 13.1 million bpd in 2024. This forecast is in comparison to the record high of 12.3 million bpd in 2019.
Despite the dip in gas prices, the EIA anticipates that U.S. gas production will continue to ascend from a record high of 99.6 billion cubic feet per day (bcfd) in 2022 to 103.7 bcfd in 2023, and to 105.1 bcfd in 2024.
The projected increase in gas production, even amidst falling prices, is largely attributed to the heightened drilling activity in shale regions such as the Permian Basin in West Texas and eastern New Mexico, which also yield a significant amount of associated gas.
