The number of operational oil and gas rigs in the US has decreased for the third consecutive week, reported Reuters, citing US energy services company Baker Hughes.
The US oil and gas rig count, a precursor to future production levels, has fallen to its lowest point since December 2021.
According to Baker Hughes, the rig count decreased by four to 576 in the week ending 24 January.
This week's reduction brings the total rig count down by 45, or 7%, from the same period last year.
Baker Hughes noted that oil rig numbers decreased by six to 472, while gas rigs saw a slight increase of one, reaching 99.
In the Permian Basin, said to be the country's largest oil-producing shale basin, the rig count dropped by six to 298, the lowest since February 2022. This represents the most significant weekly fall since August 2023.
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The overall oil and gas rig count has seen a decline of approximately 5% in 2024 and 20% in 2023, mainly due to lower US oil and gas prices in recent years. These prices have led energy companies to prioritise debt repayment and shareholder returns over production increases.
Despite predictions of a third consecutive annual decrease in US spot crude prices in 2025, the US Energy Information Administration (EIA) anticipates crude production will rise from a record 13.2 million barrels per day (mbbl/d) in 2024 to around 13.6mbbl/d in 2025. < Oil Production won't increase until a lot more wells are completed. Upstream companies will not "Drill Baby Drill" until oil prices move higher. Gas-to-oil ratio in the Permian Basin continues to drift higher.
Active Rig Count declines - Jan 28
Active Rig Count declines - Jan 28
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group