The number of active oil and natural gas drilling rigs in the United States saw the biggest weekly decline since February, according to new data from energy services firm Baker Hughes, suggesting a drop-off in future supply.
The total number of oil and gas rigs declined by seven in the week ending May 5, bringing the total U.S. rig count down to 748.
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The number of active oil rigs dropped by three, down to 588, while the number of natural gas rigs dropped by four, down to 157.
Though the total decline is the biggest single-week drop since February, Baker Hughes noted that the U.S. rig count is still up by 43 rigs, or 6%, compared to the same point in 2022.
The report comes as oil prices dropped for the third straight week on Friday amid fears about the U.S. economy and slower-than-expected manufacturing demand in China.
Gas prices also fell to a national average of $3.56 per gallon Friday, 66 cents less compared to the same point last year.
According to recent data from the Energy Information Administration, gas demand in the U.S. fell sharply by 9.51 million to 8.62 million barrels per day last week, while the number of gasoline stocks increased by 1.8 million barrels to 222.9 million barrels.
The lower demand, coupled with a higher number of gas stocks, has helped push retail gas prices lower for U.S. drivers in recent weeks.
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“The oil market volatility is leading to lower prices,” AAA spokesman Andrew Gross said in a blog post published Thursday.
“And we are also in a pre-summer driving season lull regarding domestic demand. These two factors should keep pump prices drifting lower for now," Gross wrote.