SunSirs: Beck Hughes: The Number of Active Oil and Gas Drilling Rigs in the United States has Increased for the First Time in Seven Weeks

https://www.chemnet.com   Jul 08,2024 SunSirs

According to foreign sources on July 5th, Baker Hughes, an American energy service company, stated in its closely watched report on Friday that the number of active oil and gas drilling rigs by US energy companies increased last week, marking the first time in seven weeks.

Data shows that as of the week ending July 5th, the leading indicator of future production, the total number of US oil and gas drilling rigs, increased by 4 to 585.

Baker Hughes stated that although the number of drilling rigs increased this week, the total number of drilling rigs still decreased by 95, or 14%, compared to the same period last year.

Baker Hughes announced that the number of oil drilling rigs remained unchanged at 479 this week, the lowest level since December 2021; The number of natural gas drilling rigs has increased by 4 to 101.

The number of oil and gas drilling rigs in the United States increased by 33% and 67% respectively in 2022 and 2021, but decreased by about 20% in 2023 due to the decline in crude oil and natural gas prices, soaring inflation leading to increased labor and equipment costs, and companies focusing on debt repayment and improving shareholder returns rather than increasing production.

After an 11% drop in oil prices in 2023, US crude oil futures have risen by approximately 18% so far in 2024; US natural gas futures have fallen by about 6% so far this year, and have plummeted by 44% in 2023.

The US Energy Information Agency (EIA) stated in its latest outlook report that the rise in oil prices should encourage drilling companies to increase US crude oil production from a record 12.9 million barrels per day in 2023 to 13.2 million barrels per day in 2024 and 13.7 million barrels per day in 2025.

Although natural gas futures prices are currently rising, some producers reduced their spending on drilling activities earlier this year after falling to a three-year and a half low in February and March.

The EIA states that the decrease in drilling activities should lead to a decline in US natural gas production to 102.1 billion cubic feet per day in 2024, lower than the record high of 103.8 billion cubic feet per day in 2023.

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