The number of natural gas rigs in operation in the United States has dropped to its lowest level since January 2022, according to a report by energy services firm Baker Hughes. The combined oil and gas rig count, considered an early indicator of future production levels, decreased by five to reach 624 for the week ending March 22. This marks a significant decline from the previous year, with the total rig count down by 18%. The reduction in rigs was primarily driven by a decrease in gas rigs, particularly in the Haynesville shale gas field located in Louisiana, Texas, and Arkansas. Meanwhile, the number of oil rigs also saw a slight decrease, falling by one to 509. The decline in rig count can be attributed to various factors such as fluctuating oil and gas prices, rising operational costs, and companies prioritizing debt reduction and shareholder returns over output expansion. Despite the recent drop in rig count, U.S. oil futures have shown an upward trend in 2024, while gas futures have experienced a decline. The U.S. Energy Information Administration anticipates an increase in oil output from top shale-producing regions in April, while gas production is expected to decrease as some producers adjust their drilling activities in response to market conditions.
US Natural Gas Rig Count Hits Lowest Level Since January 2022, Oil Rig Count Sees Slight Decline