UPDATE 1-US drillers cut oil and gas rigs for second week in a row - Baker Hughes

Adds monthly and quarterly details

By Scott DiSavino

Sept 27 (Reuters) - U.S. energy firms this week cut the number of oil and natural gas rigs operating for a second week in a row, energy services firm Baker Hughes BKR.O said in its closely followed report on Friday.

The oil and gas rig count, an early indicator of future output, fell by 1 to 587 in the week to Sept. 27, the lowest since early September. RIG-USA-BHI, RIG-OL-USA-BHI, RIG-GS-USA-BHI

Baker Hughes said that puts the total rig count down 36 rigs, or 6%, below this time last year.

Baker Hughes said oil rigs fell by 4 to 484 this week, their lowest since early September, while gas rigs rose by 3 to 99, their highest since late July.

That was the first time drillers cut oil rigs since mid-August and was the most oil rigs cut in a week since late June.

Despite the weekly decline, drillers added oil rigs in September for a third month in a row for the first time since July 2022.

In the third quarter, drillers added six total oil and gas rigs, boosting the quarterly count for the first time since 2022.

The oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused on paying down debt and boosting shareholder returns instead of raising output.

U.S. oil futures CLc1 were down about 4% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures NGc1 were up about 16% so far in 2024 after plunging by 44% in 2023.

Despite the decrease in oil prices, drillers were still on track to boost U.S. crude output from a record 12.9 million barrels per day (bpd) in 2023 to 13.3 million bpd in 2024 and 13.7 million bpd in 2025, according to the latest U.S. Energy Information Administration (EIA) outlook.

On the gas side, several producers reduced spending on drilling activities earlier in the year after average spot monthly prices at the U.S. Henry Hub NG-W-HH-SNL benchmark in Louisiana plunged to a 32-year low in March.

That drilling decline should cause U.S. gas output to slide to 103.4 billion cubic feet per day (bcfd) in 2024, down from a record high of 103.8 bcfd in 2023, according to the EIA. If correct, that would be the first annual output decline since the COVID-19 pandemic destroyed demand for the fuel in 2020.

(Reporting by Scott DiSavino;)

((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))