2023-10-06 17:04:36
U.S. energy companies this week reduced the number of oil and natural gas drilling rigs for the third straight week, the first time since early September, energy services company Baker Hughes said in its closely followed report from Friday.
The number of oil and gas installations, an early indicator of future production, fell by four to 619 during the week of October 6, the lowest since February 2022.
Baker Hughes said that puts the total rig count down 143, or 19%, from the same period last year.
The number of oil drilling rigs in the United States fell by five to 497 this week, its lowest level since February 2022, while the number of gas drilling rigs increased by two to 118.
U.S. oil futures are up regarding 3% year to date, following rising regarding 7% in 2022. U.S. gas futures, meanwhile, have plunged ‘regarding 26% since the start of the year, following increasing by regarding 20% last year.
Drillers have reduced the number of operating rigs for three consecutive quarters, in a belated response to the sharp drop in prices since mid-2022. While oil production has returned to pre-pandemic levels , its growth has slowed because it takes on average 12 months for a change in price to translate into a change in production.
Gas production also continued to increase, also a late reaction to high prices in 2022 and mainly due to increased interest in oil drilling in shale basins which also produce a lot of associated gas, as the United States’ principal oil field in the Permian Basin west of Texas and east of New Mexico.
The subsequent collapse in gas prices, however, was more severe and led to a more pronounced slowdown in production growth.
Shale companies have also tried to gain ground on oil production by concentrating fewer drilling rigs on the most promising sites and digging much longer laterals, which increases productivity per well.
The main US oil producer, Exxon Mobil, plans to expand its presence in the Permian region and is in an advanced stage of its development.
for the acquisition of Pioneer
Natural Resources, the basin’s third-largest producer, sources said Thursday. (Reporting by Scott DiSavino; Editing by Marguerita Choy)
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