U.S. energy firms this week cut the number of oil and natural gas rigs operating for the third time in four weeks, energy services firm Baker Hughes said in its closely followed report on Jan. 5.

The oil and gas rig count, an early indicator of future output, fell by one to 621 in the week to Jan. 5.

Baker Hughes said U.S. oil rigs rose by one to 501 this week, while gas rigs fell by two to 118.

Data provider Enverus, which publishes its own rig count data, said drillers cut 15 rigs in the week ended Jan. 3, reducing the total to 657. That put the total count down 3% in the last month and down 24% year-over-year.

Analysts have said the rig count has declined from a post-pandemic high of 784 rigs in December 2022 due mostly to a drop in oil and gas prices.

U.S. oil futures dropped by around 11% in 2023 after gaining 7% in 2022. U.S. gas futures, meanwhile, plunged by about 44% in 2023 after rising about 20% in 2022.

Fourteen of the independent exploration and production companies tracked by U.S. financial services firm TD Cowen said they planned to cut spending by around 4% in 2024 versus 2023.

In 2023, 25 of the E&Ps TD Cowen tracks said they planned to boost spending by around 20% versus the prior year after increasing spending about 40% in 2022 and 4% in 2021.

Despite lower prices, spending and rig counts, U.S. oil and gas output was still on track to hit record highs in 2023 and 2024 as firms complete work on already drilled wells.

The total number of drilled but uncompleted (DUC) wells remaining dropped to a record low of 4,415 in November, according to federal energy data going back to December 2013.

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