By Scott Desavino

(Reuters) – U.S. energy companies this week cut the number of oil and natural gas rigs operating for a third straight week to the lowest since December 2021, energy services firm Baker Hughes said , in its follow-up report on Friday.

The oil and gas count, an early indicator of future production, fell by four to 576 in the week to January 24.

Baker Hughes said this week’s decline brings the total count to 45, or 7% below this time last year.

Baker Hughes said oil rigs fell six to 472 this week, the lowest since December 2021, while gas rigs rose by one to 99.

In the Permian Basin in West Texas and eastern New Mexico, the nation’s largest oil-producing shale basin, the rig count fell six for the week to 298, the lowest since February of 2022.

The six-rig decline in the Permian was the biggest weekly drop since August 2023.

The oil and gas count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past two years prompted energy companies to focus -more on paying down debt and increasing shareholder returns rather than increasing production.

While analysts forecast U.S. spot crude prices could decline for a third straight year in 2025, the U.S. Energy Information Administration (EIA) projected crude production. BPD in 2025.

On the gas side, the EIA projected a 43% increase in spot gas prices in 2025 would prompt producers to increase drilling activity this year after a 14% price drop in 2024 caused several energy companies cut for the first time since covid. 19 Pandemic reduced fuel demand in 2020. (NGAS/POLL)

EIA projected gas production would increase to 104.5 billion cubic feet per day (BCFD) in 2025, to 103.1 BCFD in 2024 and a record 103.6 BCFD in 2023.

(Reporting by Scott Desavino; Editing by Marguerita Choy)