U.S. energy companies have reduced the total number of active rigs for the second consecutive week, despite an increase in the number of oil rigs to the highest level since June, according to Baker Hughes. Their latest report shows that the oil and gas rig count dropped by two, bringing the total to 590 for the week ending April 4.
This decline marks a decrease of 30 rigs, or 5%, compared to the same period last year. The report highlights a rise in oil rigs, which increased by five to reach 489, marking the highest count since June.
Conversely, gas rigs saw a significant decline, falling by seven—the largest one-week drop since May 2023—bringing their count down to 96, the lowest level since September. In the Permian Basin, the leading oil-producing shale region in West Texas and eastern New Mexico, the rig count went down by three, resulting in a total of 294, the lowest since February 2022.
Overall, the oil and gas rig count has experienced a reduction of approximately 5% in 2024 and 20% in 2023, primarily due to lower oil and gas prices over the past two years. This decline has prompted energy firms to prioritize enhancing shareholder returns and reducing debt rather than increasing production.
Looking ahead, while analysts predict that U.S. spot crude prices might decline for three consecutive years by 2025, the U.S. Energy Information Administration (EIA) forecasts that crude production will rise from a record 13.2 million barrels per day (bpd) in 2024 to approximately 13.6 million bpd in 2025. Additionally, the EIA expects gas output to increase to 105.2 billion cubic feet per day (bcfd) in 2025, reflecting a recovery from prior price drops.