U.S. energy companies have significantly reduced the number of oil rigs this week, marking the largest decline since June 2023. According to Baker Hughes, the total oil and natural gas rig count decreased by seven to reach 583 for the week ending April 11, indicating a downturn for the third consecutive week. This reduction brings the total count down by 34 rigs compared to the same period last year, representing a 6% decline. The report highlights that while the number of oil rigs fell by nine to 480, the count for gas rigs experienced a slight increase of one, bringing it to 97.
In the Permian Basin, a vital area for oil production in West Texas and eastern New Mexico, the rig count dropped by five, marking a total of 289—its lowest level since December 2021. Recent trends have seen the oil and gas rig count decline approximately 5% in 2024 and 20% in 2023. This shift has arisen from lower U.S. oil and gas prices over the past two years, which have prompted energy firms to prioritize shareholder returns and reduce their debt instead of ramping up production. Despite analysts predicting another year of declining U.S. spot crude prices in 2025, the U.S. Energy Information Administration (EIA) has forecasted an increase in crude output from a record of 13.2 million barrels per day (bpd) in 2024 to 13.5 million bpd in 2025.
However, this outlook is adjusted downward from previous estimates due to anticipated weaker global economic growth and oil demand as a result of U.S. tariffs. The EIA also indicated a projected decrease in oil production in the Permian Basin, estimating it will fall from 6.57 million bpd in March to 6.51 million bpd in April. Conversely, the EIA forecasts a significant increase in gas output, projecting it to rise to 105.3 billion cubic feet per day (bcfd) in 2025, up from 103.2 bcfd in 2024.