US drillers cut oil and gas rigs for second week in a row -Baker Hughes

News wire — U.S. energy firms this week reduced the number of oil and natural gas rigs operating for a second week in a row, including the deepest oil rig cut since early June, energy services firm Baker Hughes said in its closely followed report on Friday.

The oil and gas rig count, an early indicator of future output, fell by six to 669 in the week to July 21, the lowest since March 2022.

That was also the 11th time in the last 12 weeks that drillers cut rigs.

U.S. oil rigs fell by seven to 530 this week, their lowest since March 2022, while gas rigs dropped by two to 131.

Baker Hughes said drillers cut four rigs in the Permian in West Texas and eastern New Mexico, the nation’s biggest shale oil formation, bringing the total down to 333 rigs. They also cut two rigs in the Eagle Ford bringing the total in that South Texas shale basin down to 57 rigs. That is the lowest in both basins since April 2022.

Data provider Enverus, which publishes its own rig count data, said drillers added five rigs in the week ended July 19, boosting the total to 733. Nevertheless, the overall count was still down about seven rigs in the last month and down 15% year-over-year.

Baker Hughes and rivals Halliburton and SLB this week warned of weakness in U.S. shale activity as producers have kept a tight rein on spending since the 2020 downturn and due to softer oil and gas prices.

U.S. oil futures were down about 4% so far this year after gaining about 7% in 2022. U.S. gas futures, meanwhile, have plunged about 40% so far this year after rising about 20% last year.

U.S. shale oil and gas production will fall in August for the first time since December, the U.S. Energy Information Administration (EIA) said in its monthly Drilling Productivity Report this week.