US drillers preserve oil and natgas rigs unchanged for second week – Baker Hughes

By Scott DiSavino

(Reuters) -U.S. power companies this week stored the variety of oil and pure gasoline rigs unchanged for the second week in a row, power providers agency Baker Hughes (NASDAQ:BKR) mentioned in its carefully adopted report on Friday.

The oil and gasoline rig rely, an early indicator of future output, remained at 589 within the week to Dec. 20.

Baker Hughes mentioned that places the full rig rely down 31 rigs, or 5% under this time final yr.

Baker Hughes mentioned oil rigs have been up one to 483 whereas pure gasoline rigs have been down one to 102. The oil rig rely was the very best since September.

The oil and gasoline rig rely dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, because of a decline in oil and gasoline costs, larger labor and tools prices from hovering inflation and as corporations centered on paying down debt and boosting shareholder returns as a substitute of elevating output.

U.S. oil futures didn’t transfer after the Baker Hughes knowledge, leaving them down about 3% for the yr up to now after dropping by 11% in 2023. U.S. gasoline futures are up about 49% to this point in 2024 after plunging by 44% in 2023.

The 25 unbiased exploration and manufacturing (E&P) corporations tracked by U.S. monetary providers agency TD Cowen mentioned that on common the E&Ps deliberate to depart spending in 2024 roughly unchanged from 2023.

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

U.S. crude output was on monitor to rise from a document 12.9 million barrels per day (bpd) in 2023 to 13.2 million bpd in 2024 and 13.5 million bpd in 2025, in response to the most recent U.S. Power Data Administration (EIA) outlook.

On the gasoline aspect, a number of producers diminished drilling actions this yr after month-to-month common spot costs on the U.S. Henry Hub benchmark in Louisiana plunged to a 32-year low in March, and remained comparatively low for months after that.

That discount in drilling exercise ought to trigger U.S. gasoline output to say no for the primary time for the reason that COVID-19 pandemic lower demand for the gas in 2020.

EIA projected gasoline output would slide to 103.2 billion cubic ft per day (bcfd) in 2024, down from a document excessive of 103.8 bcfd in 2023.