This week, U.S. energy companies reduced the number of operational oil and natural gas rigs for the sixth consecutive week, according to the closely monitored report from energy services firm Baker Hughes, released on Friday.
The report indicated that the oil and gas rig count, a key early measure of future production, declined by 12, settling at 642 for the week ending August 18. This is the lowest level observed since February 2022.
Baker Hughes noted that this decrease puts the total rig count 120 rigs, or 15.7%, lower than the same period last year. The count for U.S. oil rigs declined by five to 520 this week, marking the lowest point since March 2022, while the count for gas rigs fell by six to 117, the lowest since February 2022.
In the financial markets, U.S. oil futures have appreciated by nearly 1% so far this year, following a gain of about 7% in 2022. In contrast, U.S. gas futures have seen a significant decline, plummeting more than 40% this year after enjoying a nearly 20% rise last year.
Data released on Monday by the Energy Information Administration (EIA) revealed that oil and natural gas production from leading U.S. shale regions is projected to decrease in September for the second consecutive month, reaching the lowest output levels since May. However, separate EIA data released on Wednesday highlighted that crude production has surged to its highest level since the COVID-19 pandemic severely impacted fuel consumption.
Lastly, financial services firm TD Cowen has reported that independent exploration and production companies it monitors are set to increase spending by approximately 19% in 2023 compared to 2022.
