The oil and gas rig count, an early indicator of future output, fell by four to 590 in the week to June 14, 2024. That puts the countdown for the second week in a row.
Baker Hughes said the total rig count is down 97 rigs, or 14%, below this time last year. Oil rigs fell by four to 488 this week, also their lowest since January 2022, while gas rigs were unchanged at 98, which was the lowest since October 2021.
In Texas, the state with almost half of the country's active rigs, the total count slid by 2 to 285, the lowest number of rigs operating in the state since January 2022.
The oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused on paying down debt and boosting shareholder returns instead of raising output.
The US oil futures were up about 10% so far in 2024 after dropping by 11% in 2023, while US gas futures were up about 15% so far in 2024 after plunging by 44% in 2023.
The increase in oil prices should encourage drillers to boost US crude output from a record 12.9 million barrels per day (bpd) in 2023 to 13.2 million bpd in 2024 and 13.7 million bpd in 2025, according to the latest US Energy Information Administration (EIA) outlook.
Even though gas futures were trading higher now, several producers reduced spending on drilling activities earlier in the year after prices drop to 3-1/2-year lows in February and March.
The drilling decline should cause US gas output to slide to 102.1 billion cubic feet per day (bcfd) in 2024, down from a record high of 103.8 bcfd in 2023, according to the EIA.
No comments:
Post a Comment