In its February 14 report, Baker Hughes revealed that U.S. energy companies increased oil and gas rig counts for the third consecutive week, marking the first such streak since December 2023.
As an early indicator of future production, the total oil and gas rig count rose by 2 to 588 in the week ending February 14.
Despite the weekly increase, Baker Hughes noted that the total rig count remains 33 lower than the same period last year, reflecting a 5% year-on-year decrease.
The report detailed a rise of 1 oil rig last week, bringing the total to 481, while gas rigs also increased by 1 to 101.
**Long-Term Trends and Industry Shifts**
U.S. oil and gas rig counts have declined by approximately 5% in 2024 and 20% in 2023, driven by lower energy prices in recent years. This has prompted energy firms to prioritize debt repayment and shareholder returns over production growth.
**Industry Developments: SLB Restructuring**
According to a source familiar with the matter and an internal email seen by Reuters, SLB (formerly Schlumberger) is restructuring certain business functions and expects further layoffs. The source stated that these changes come as the Houston-based company advances a cost-saving initiative and prepares for modest growth this year, amid cautious spending by its customers due to concerns over oil market oversupply.
**Outlook for 2025**
While analysts predict U.S. crude oil spot prices will remain flat in 2025, the U.S. Energy Information Administration (EIA) forecasts that crude oil production will increase from a record 13.2 million barrels per day (bpd) in 2024 to approximately 13.6 million bpd in 2025.
In natural gas, the EIA expects a 73% rise in spot prices in 2025, which is likely to encourage producers to ramp up drilling activity this year. This follows a 14% decline in natural gas prices in 2024, which led several energy companies to cut production for the first time since the COVID-19 pandemic reduced demand in 2020.
The EIA also projects that natural gas production will increase from 103.1 billion cubic feet per day (Bcf/d) in 2024 and the record 103.6 Bcf/d in 2023 to 104.6 Bcf/d in 2025.
*Reprinted from:《Petroleum & Equipment》December 2024 e-Journal*
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