Jan 17 (Reuters) - U.S. energy firms this week cut the

number of oil and natural gas rigs operating for a second week

in a row to the lowest since December 2021, 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 four to 580 in the week to Jan. 17.

Baker Hughes ( BKR ) said this week's decline puts the total rig

count down 40 rigs, or 6% below this time last year.

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

their lowest since November, while gas rigs also fell by two to

98, their lowest since September.

In the Haynesville shale in Arkansas, Louisiana and Texas,

drillers cut two rigs, bringing the total down to 29, the lowest

since January 2017.

In the Williston basin in Montana and North Dakota,

drillers cut four rigs, bringing the total down to 33, the

lowest since January 2024.

And in Louisiana, drillers cut one rig, bringing the

total down to 29, the lowest since August 2020.

The oil and gas rig count declined by about 5% in 2024

and 20% in 2023 as lower U.S. oil and gas prices

over the past couple of years prompted energy firms to focus

more on paying down debt and boosting shareholder returns rather

than raising output.

Even though analysts forecast U.S. spot crude prices could

decline for a third year in a row in 2025, the U.S. Energy

Information Administration (EIA) projected crude output would

rise from a record 13.2 million barrels per day (bpd) in 2024 to

around 13.6 million bpd in 2025.

On the gas side, EIA projected a 43% increase in spot gas

prices in 2025 would prompt producers to boost

drilling activity this year after a 14% price drop in 2024

caused several energy firms to cut output for the first time

since the COVID-19 pandemic reduced demand for the fuel in 2020.

EIA projected gas output would rise to 104.5 billion cubic

feet per day (bcfd) in 2025, up from 103.1 bcfd in 2024 and a

record 103.6 bcfd in 2023.