US energy companies this week reduced the number of oil and gas drilling rigs in operation for the third consecutive month for the first time since late June, according to energy services company Baker Hughes BKR in its much-noticed report on Friday.
The oil and gas rig count, a leading indicator of future production, fell by two to 583 in the week ended August 30, the lowest since June. (RIG-USA-BHI), (RIG-OL-USA-BHI), (RIG-GS-USA-BHI)
According to Baker Hughes, the total number of drilling rigs is 48, or 8 percent, lower than at this time last year.
According to Baker Hughes, the oil rig count remained unchanged at 483 this week, while the gas rig count fell by two to 95, the lowest since April 2021.
This month, the total number of oil and gas rigs decreased by six after increasing by eight in the previous month.
The number of oil rigs increased by one in August, while the number of gas rigs decreased by six in August.
In the Marcellus Shale area of Pennsylvania, Ohio and West Virginia, the country’s largest gas producing region, drillers have removed two rigs, bringing the total to 23, the lowest since August 2016.
In Pennsylvania, three rigs were dismantled, bringing the total to 18, the lowest since December 2021.
The number of oil and gas rigs declined by about 20 percent in 2023 (link), after increasing by 33 percent in 2022 and 67 percent in 2021, due to the decline in oil and gas prices, higher labor and equipment costs as a result of rising inflation, and the fact that companies focused on paying down debt and increasing shareholder returns rather than increasing production.
The US oil futures 
CL1! have risen about 3 percent so far in 2024 after falling 11 percent in 2023, while US gas futures 
NG1! have fallen by about 16 percent so far in 2024, after plunging by 44 percent in 2023.
Although oil prices have risen so far this year, the decline in gas futures for the second year in a row has prompted many energy companies to cut capital spending in 2024. This drop in spending was expected to reduce gas production (link) in 2024 for the first time since 2020.
The 26 independent exploration and production (E&P) companies monitored by U.S. financial services provider TD Cowen said they plan to cut spending by about 2 percent in 2024 compared to 2023.
This compares with annual spending increases of 27 percent in 2023, 40 percent in 2022 and 4 percent in 2021.
