U.S. energy firms this week cut the number of oil and natural gas rigs for the first time in five weeks even as crude production hit its highest in more than two years in response to tight worldwide supply and high prices.
The U.S. oil and gas rig count, an early indicator of future output, fell by three to 750 in the week to July 1, energy services firm Baker Hughes Co said in its closely followed report on Friday.
Despite the fall, Baker Hughes said that puts the total rig count up 275, or 58%, over this time last year.
U.S. oil rigs rose one to 595 this week, their highest since March 2020, while gas rigs fell four to 153, in the biggest decline since August 2021.
Even though the total rig count was up for a record 23 months through June, weekly increases have mostly been in single digits as many companies focus more on returning money to investors and paying down debt rather than boosting output.
But with oil prices up about 43% so far this year after soaring 55% in 2021 – and pressure from the government – a growing number of energy firms said they plan to boost spending for a second year in a row in 2022.
Oil production rose to 12.1 million barrels per day (bpd) last week, its highest since April 2020, though the weekly figures are volatile and considered less reliable than monthly data.
U.S. crude production was on track to rise from 11.2 million bpd in 2021 to 11.9 million bpd in 2022 and 13.0 million bpd in 2023, according to official forecasts. That compares with a record 12.3 million bpd in 2019.