May 30 (Reuters) - U.S. energy firms this week cut the

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

a row to the lowest since November 2021, energy services firm

Baker Hughes ( BKR ) said in its closely followed report on

Friday.

It was the first time since September 2023 that the number

of rigs declined for five straight weeks.

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

output, fell by three to 563 in the week to May 30.

Baker Hughes ( BKR ) said this week's decline put the total count

down by 37 rigs, or 6%, from this time last year.

Baker Hughes ( BKR ) said oil rigs fell by four to 461 this week,

their lowest since November 2021. Gas rigs rose by one to 99.

In the Permian Basin in West Texas and eastern New Mexico,

the nation's biggest oil-producing shale formation, drillers cut

one rig, bringing the total down to 278, the lowest since

November 2021.

In New Mexico, drillers cut one rig, bringing the total

down to 91, the lowest since December 2021.

For the month, the total count dropped by 24, its third

straight monthly decrease and the biggest monthly decline since

August 2023.

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

20% in 2023. Lower U.S. oil and gas prices over

the past couple of years prompted energy firms to focus more on

boosting shareholder returns and paying down debt rather than

increasing output.

The independent exploration and production (E&P) companies

tracked by U.S. financial services firm TD Cowen said they

planned to cut capital expenditures by around 3% in 2025 from

levels seen in 2024.

That compares with roughly flat year-over-year spending in

2024, and increases of 27% in 2023, 40% in 2022 and 4% in 2021.

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

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 13.4 million bpd in 2025.

On the gas side, EIA projected an 88% 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 104.9 billion cubic

feet per day (bcfd) in 2025, up from 103.2 bcfd in 2024 and a

record 103.6 bcfd in 2023.