The energy firms in the US have cut the operation for several rigs producing oil and natural gas for the first time since 2018. We all know that the number of rigs equates to the output level, and this week popular energy firm Baker Hughes Co. has reported that the numbers fell by one to 402. The count as of now is 396 rigs, and this is less than 49 percent of production that was reported last year. Meanwhile, the output for natural gas and oil has dropped to a record low of 244 in August. In the last week, the US oil rigs were around 309, whereas the number of gas rigs continues to remain the same at 92. Futures of the US crude oil spiked to $68 per barrel this week, and this is the highest recorded price since 2018.
This new price is mostly due to the crash experienced last year due to the ongoing Covid crisis. The government has now revised down the prices for 2021 because a decline in crude oil production is expected this year. Before the start of the pandemic, the oil companies were cutting down by four rigs every week to focus more on the cash flows, improve returns for the investors, and reduce debts. The companies had to accelerate their production by more than 45 per week from March to June following the crisis.