news/BKR/2023.02.17/U.S. oil & gas rig count falls for second time in three weeks - Baker Hughes.txt

Feb 17 (Reuters) - U.S. energy firms this week cut the
number of oil and natural gas rigs operating for the second time
in three weeks, energy services firm Baker Hughes Co
said in its closely followed report on Friday.The oil and gas rig count, an early indicator of future
output, fell by one to 760 in the week to Feb. 17. <RIG-USA-BHI>
<RIG-OL-USA-BHI> <RIG-GS-USA-BHI>Despite this week's rig decline, Baker Hughes said the total
count was still up 115, or 18%, over this time last year.Oil rigs fell two to 607 this week, while gas rigs rose
one to 151.U.S. oil futures were down about 6% so far this year
after gaining about 7% in 2022. U.S. gas futures,
meanwhile, have plunged about 50% so far this year after rising
about 20% last year.Weaker energy prices are expected to impact drilling
activity, which was recovering from pandemic-related cuts, but
slowly due to rising labor and equipment costs and as many firms
were still more focused on returning money to investors and
paying down debt rather than boosting production.To avoid a looming oversupply situation in the gas
market that has already caused prices to drop to 28-month lows
this week, many analysts have said producers will have to cut
the number of rigs drilling for gas this year.Gas producers starting the year with fewer hedges than
historically and will have to sell more gas at the market rate
of about $2.45 per million British thermal units (mmBtu).That is below the breakeven prices for producing gas in some
regions and may force some companies to reduce drilling and put
off completing wells.Despite recent price declines, the U.S. Energy
Information Administration (EIA) projected that oil and gas
production from the seven biggestshale basinswould rise to record highs in March.Overall, U.S. crude production was on track to rise from
11.9 million barrels per day (bpd) in 2022 to 12.5 million bpd
in 2023 and 12.7 million bpd in 2024, according to the EIA. That
compares with a record 12.3 million bpd in 2019.U.S. gas production was to rise on track to rise from a
record 98.09 billion cubic feet per day (bcfd) in 2022 to 100.27
bcfd in 2023 and 101.68 bcfd in 2024, EIA data showed.
(Reporting by Scott DiSavino
Editing by Marguerita Choy)