This week, drillers cut the number of oil and gas rigs operating for a third week in a row.
The oil and gas rig count, an early indicator of future output, fell by five to 664 in the week to July 28, the lowest since March 2022.
Baker Hughes said that puts the total rig count down 103, or 13%, below this time last year.
U.S. oil rigs fell by one to 529 this week, their lowest since March 2022, while gas rigs decreased by three to 128.
For the month, drillers cut 10 total oil and gas rigs in July, the smallest decline in three months.
Oil rigs dropped by 16 rigs in July. That put the oil count down for an eighth month in a row for the first time since drillers cut oil rigs for a record 12 consecutive months through November 2019.
Gas rigs, meanwhile, rose by four rigs in July, their first increase in three months.
U.S. oil futures were down about 1% so far this year after gaining about 7% in 2022. U.S. gas futures , meanwhile, have plunged about 42% so far this year after rising about 20% last year.
Profits for the top two U.S. producers Exxon Mobil (XOM.N) and Chevron (CVX.N) have dropped by about half from a bumper 2022 due to weaker prices. But both companies, which have been favoring repaying shareholders over capital spending, have kept their cash distribution programs unaltered.
Oilfield service providers on Thursday, however, signaled a recovery in rig count later this year, citing an uptick in oil and gas prices.
Despite lower prices, especially for gas, U.S. crude production was on track to rise from 11.9 million barrels per day (bpd) in 2022 to 12.6 million bpd in 2023 and 12.9 million bpd in 2024, according to projections from the U.S. Energy Information Administration (EIA) in July. That compares with a record 12.3 million bpd in 2019.
U.S. gas production was on track to rise from a record 98.13 billion cubic feet per day (bcfd) in 2022 to 102.35 bcfd in 2023 and 102.40 bcfd in 2024, according to EIA's projection.
