April 5 (Reuters) - U.S. energy firms this week cut the

number of oil and natural gas rigs operating for a third week in

a row for the first time since October, 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, fell by one to 620 in the week to April 5, the lowest

since early February.

Baker Hughes ( BKR ) said that puts the total rig count down 131, or

17%, below this time last year.

Baker Hughes ( BKR ) said oil rigs rose two to 508 this week, while

gas rigs fell by two to 110, their lowest since January 2022.

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 22% so far in 2024

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

meanwhile, were down about 28% 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 and 13.6 million

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

Administration (EIA) outlook.

But the drop in gas prices to a 3-1/2-year low in February

and March will cut U.S. gas output to 103.4 billion cubic feet

per day (bcfd) in 2024 from a record 103.8 bcfd in 2023,

according to the EIA, as some producers slash spending and

reduce drilling activities.

Analysts, however, said it could take a few months for those

planned gas rig reductions to show up in the data.