U.S. energy firms this week cut the number of oil and natural gas rigs operating for a second week in a row, energy services firm Baker Hughes said in its closely followed report on Sept. 27.

The oil and gas rig count, an early indicator of future output, fell by 1 to 587 in the week to Sept. 27, the lowest since early September.

Baker Hughes said oil rigs fell by four to 484 this week, their lowest since early September, while gas rigs rose by three to 99, their highest since late July.

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 were down about 4% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures were up about 16% so far in 2024 after plunging by 44% in 2023.

Despite the decrease in oil prices, drillers were still on track to boost U.S. crude output from a record 12.9 MMbbl/d in 2023 to 13.3 million bpd in 2024 and 13.7 MMbbl/d in 2025, according to the latest U.S. Energy Information Administration (EIA) outlook.

On the gas side, several producers reduced spending on drilling activities earlier in the year after average spot prices at the U.S. Henry Hub benchmark in Louisiana plunged to a 32-year low in March.

That drilling decline should cause U.S. gas output to slide to 103.4 Bcf/d in 2024, down from a record high of 103.8 Bcf/d in 2023, according to the EIA.

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