Dec 20 (Reuters) - U.S. energy firms this week kept the

number of oil and natural gas rigs unchanged for the second week

in a row, 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, remained at 589 in the week to Dec. 20.

Baker Hughes ( BKR ) said that puts the total rig count down 31

rigs, or 5% below this time last year.

Baker Hughes ( BKR ) said oil rigs were up one to 483 while natural

gas rigs were down one to 102. The oil rig count was the highest

since September.

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 did not move after the Baker Hughes ( BKR )

data, leaving them down about 3% for the year to date after

dropping by 11% in 2023. U.S. gas futures are up about

49% so far in 2024 after plunging by 44% in 2023.

The 25 independent exploration and production (E&P)

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

that on average the E&Ps planned to leave spending in 2024

roughly unchanged from 2023.

That compares with year-over-year spending increases of 27%

in 2023, 40% in 2022 and 4% in 2021.

U.S. crude output was on track to rise from a record 12.9

million barrels per day (bpd) in 2023 to 13.2 million bpd in

2024 and 13.5 million bpd in 2025, according to the latest U.S.

Energy Information Administration (EIA) outlook.

On the gas side, several producers reduced drilling

activities this year after monthly average spot prices at the

U.S. Henry Hub benchmark in Louisiana plunged to a

32-year low in March, and remained relatively low for months

after that.

That reduction in drilling activity should cause U.S. gas

output to decline for the first time since the COVID-19 pandemic

cut demand for the fuel in 2020.

EIA projected gas output would slide to 103.2 billion cubic

feet per day (bcfd) in 2024, down from a record high of 103.8

bcfd in 2023.