Aug 9 (Reuters) - U.S. energy firms this week added oil

and natural gas rigs for the third time in four weeks, energy

services firm Baker Hughes ( BKR ) said in its closely followed

report on Friday.

The oil and gas rig count, an early indicator of future

output, rose by two to 588 in the week to Aug. 9.

Despite this week's rig increase, Baker Hughes ( BKR ) said the

total count was still down 66 rigs, or 10% below this time last

year.

Baker Hughes ( BKR ) said oil rigs rose by three to 485 this week,

while gas rigs fell by one to 97.

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 were up about 7% so far in 2024

after dropping by 11% in 2023, while U.S. gas futures

were down about 15% so far in 2024 after plunging by 44% in

2023.

That increase in oil prices should encourage drillers to

boost U.S. crude output from a record 12.9 million barrels per

day (bpd) in 2023 to 13.2 million bpd in 2024, 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 prices dropped to

3-1/2-year lows in February and March.

That drilling decline should cause U.S. gas output to slide

to 103.3 billion cubic feet per day (bcfd) in 2024, down from a

record high of 103.8 bcfd in 2023, according to the EIA.