U.S. oil and gas rig count falls for fourth straight week

Foreign news on May 26, energy services company Baker Hughes Co. said in a report on Friday that the number of oil and gas rigs drilled by U.S. energy companies fell for the fourth consecutive week this week, and the total number of oil and gas rigs fell this month. 44, the biggest monthly drop in three years.

The U.S. oil and gas rig count, a leading indicator of future output, fell by nine to 711 in the week ended May 26, the lowest since May 2022, Baker Hughes data showed.

That brought the rig count down by 16, or 2%, from a year earlier, Baker Hughes said.

The U.S. oil rig count fell by five to 570 this week, the lowest since May 2022, while the natural gas rig count fell by four to 137, the lowest since March 2022.

In May, the number of oil rigs fell by 21, the largest monthly drop since June 2020; the number of natural gas rigs fell by 24, the largest monthly drop since January 2016.

Reporting its rig count data, data provider Enverus said drillers cut 13 rigs in the week to May 24, bringing the total down to 767. That brought the rig count down by about 42 over the past month, down 7% from last year.

U.S. crude futures are down about 10% so far this year, ahead of gains of about 7% in 2022. Meanwhile, U.S. natural gas futures have fallen about 50% this year after rising about 20% last year.

The sharp drop in natural gas prices has led some exploration and production companies, such as Chesapeake Energy, to announce plans to reduce production by cutting some rigs, particularly in Arkansas, Louisiana and the Haynesville shale field in Texas.

Goldman Sachs analysts said in a note this week: "We believe that current gas prices are prompting producers in Haynesville to eventually stop growth, so we believe the rig count could decline further from current levels. "

The rig count in the Haynesville region fell by three to 54 this week, the lowest since February 2022.

Analysts at the energy consultancy said in a note this week that it could take "a lag of several weeks before the reduced rig count translates into substantial output cuts."