U.S. energy firms cut the most oil rigs in a week since September 2021, energy services firm Baker Hughes Co said in its closely followed report on Friday.
Oil rigs fell 10 to 613, their lowest since November, while gas rigs rose six to 156, in their biggest weekly rise since February.
The combined oil and gas rig count, an early indicator of future output, fell four to 771 in the week to Jan. 20, the lowest since November.
Despite this week’s rig decline, Baker Hughes said the total count was still up 167, or 28%, over this time last year.
U.S. oil futures were up about 1% so far this year after gaining about 7% in 2022.
Oil output from top shale regions in the United States is due to rise by about 77,300 barrels per day (bpd) to a record 9.38 million bpd in February, the U.S. Energy Information Administration (EIA) said in its productivity report on Tuesday.
However, that monthly increase would be the lowest since June, with growth shrinking on weaker productivity per well and as inflation cuts into oil companies’ production budgets.
Overall, U.S. crude production was on track to rise from 11.9 million bpd in 2022 to 12.4 million bpd in 2023 and 12.8 million bpd in 2024, according to EIA forecasts. That compares with a record 12.3 million bpd in 2019.
Olivier Le Peuch, chief executive at oilfield service company SLB, formerly called Schlumberger, said he sees onshore drilling activity in North America picking up as companies look to rebuild drilled but uncompleted (DUC) inventory.
There “is a little bit of a shift to drilling to rebuild the DUC inventory that will favor us in a month and a couple of quarters to come before the usual plateauing or a moderation of growth in the second half” of the year, Le Peuch said.
The number of DUC wells in the seven biggest U.S. shale basins fell to 4,521 in October 2022, the lowest in a month since December 2013, according to federal data.
The EIA said this week that producers drilled 1,011 wells in the seven biggest U.S. shale basins in December 2022, the most since March 2020. That helped boost total DUC wells in those basins by 40 to 4,577 in December 2022, the most since August 2022. (Reporting by Scott DiSavino Editing by Marguerita Choy)