U.S. energy firms this week kept the number of oil and natural gas rigs unchanged for the second week in a row, energy services firm Baker Hughes said in its closely followed report on Dec. 20.

The oil and gas rig count, an early indicator of future output, remained at 589 in the week to Dec. 20. 

Baker Hughes said that puts the total rig count down 31 rigs, or 5% below this time last year.

Baker Hughes said oil rigs were up one to 483 while natural gas rigs were down one to 102. The oil rig count was the highest since September.

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.

U.S. oil futures did not move after the Baker Hughes data, leaving them down about 3% for the year to date after dropping by 11% in 2023. U.S. gas futures are up about 49% so far in 2024 after plunging by 44% in 2023.

The 25 independent E&P companies tracked by U.S. financial services firm TD Cowen said that on average the E&Ps planned to leave spending in 2024 roughly unchanged from 2023.

That compares with year-over-year spending increases of 27% in 2023, 40% in 2022 and 4% in 2021.

U.S. crude output was on track to rise from a record 12.9 MMbbl/d in 2023 to 13.2 MMbbl/d in 2024 and 13.5 MMbbl/d in 2025, according to the latest U.S. Energy Information Administration (EIA) outlook.

On the gas side, several producers reduced drilling activities this year after monthly average spot prices at the U.S. Henry Hub benchmark in Louisiana plunged to a 32-year low in March, and remained relatively low for months after that.

That reduction in drilling activity should cause U.S. gas output to decline for the first time since the COVID-19 pandemic cut demand for the fuel in 2020.

EIA projected gas output would slide to 103.2 Bcf/d in 2024, down from a record high of 103.8 Bcf/d in 2023.

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