The rig count is considered an early indicator of future production and is closely monitored by industry stakeholders.
Its count rose by one to 620 for the week to 19 January 2024.
According to Baker Hughes, natural gas rigs increased by three to 120, but oil rigs dropped by two to 497, representing the lowest count since mid-November 2023.
The rig count saw a reduction of around 20% last year, following a 33% rise in 2022 and a 67% increase in 2021.
This decline in 2023 is attributed to lower oil and gas prices, increased drilling costs and a shift in company strategies towards enhancing shareholder returns rather than expanding expenditure.
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Oil futures in the US have recovered by around 3% this year after a decline of 11% the previous year. In contrast, US gas futures have seen a slight decrease of around 1% after a substantial 44% drop last year.
Despite the challenges of lower prices and reduced rig counts, US oil and gas production is projected to reach record levels this year and the next.
This is due to efficiency improvements and the completion of wells that have already been drilled.
The count of drilled but uncompleted wells has fallen to a record low of 4,374 in December 2023, as per federal energy data that goes back until the last month of 2013.
The US Energy Information Administration (EIA) has raised its forecast for oil production on a per rig basis from new wells in shale basins.
However, the EIA also anticipates a decline in US oil output from major shale-producing regions in February, marking the fifth consecutive month of reduction.