US Gas Drilling Rig Count Highest Since 2019

(Reuters) — U.S. natural gas prices have climbed to the highest in more than 13 years as storage inventories remain well below average while the drought and lack of hydroelectric generation threatens to stretch them even further. Front-month futures prices for gas delivered at Henry Hub in Louisiana have climbed to around $9 per million Btu, up from $3 at the same point a year ago.

Prices are the highest after adjusting for inflation since October 2008, when the financial crisis was intensifying, and the economy was heading deeper into the great recession. Last week, working stocks in underground gas storage were 348 billion cubic feet (16%) below the pre-pandemic five-year seasonal average. High prices signal the need to reduce consumption, including by switching from gas-fired to coal-fired generation as much as possible, while maximizing drilling and new production.

The total number of rigs drilling for gas has climbed to 150, the highest since late 2019, and up from just 100 this time a year ago, according to field services company Baker Hughes. The number of oil rigs, which produce associated gas as a byproduct, has climbed to 576, up from 343 a year ago, and the highest since just before the first wave of the pandemic arrived in early 2020.

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