July 12 (Reuters) - U.S. energy firms this week cut the

number of oil and natural gas rigs operating for the fifth time

in six weeks, energy services firm Baker Hughes ( BKR ) said in

its report on Friday.

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

output, fell by one to 584 in the week to July 12.

Baker Hughes ( BKR ) said that puts the total rig count down 91

rigs, or 13%, below this time last year.

Baker Hughes ( BKR ) said oil rigs fell by one to 478 this week,

their lowest since December 2021, while gas rigs fell by one to

100.

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 are up about 16% so far in 2024

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

down about 7% 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 13.3 million bpd in 2024 and 13.8 million

bpd in 2025, according to the latest U.S. Energy Information

Administration (EIA) outlook.

A decline in gas prices to 3-1/2-year lows in February and

March encouraged several producers to reduce spending on

drilling activities.

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

to 103.5 billion cubic feet per day (bcfd) in 2024, down from a

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