The number of rigs drilling for natural gas in the United States fell 12 this week to 973, its second straight weekly decline, according to a report on Friday by oil services firm Baker Hughes in Houston.
Two weeks ago, the gas-directed rig count hit 992, its highest level since February 2009 when there were 1018 rigs drilling for gas.
Horizontal rigs - the type used to extract gas from shale - hit a record high for a fourth straight week, climbing 9 to 904, Baker Hughes said.
U.S. front-month September natural gas futures on the New York Mercantile Exchange NGU0, which expire later Friday, showed little reaction to the data, still trading down about 11 cents in the $3.71 area after hitting an 11-month spot low of $3.702 at midday.
Low gas prices have some expecting gas drilling to finally slow later this year or early next year, but the rig count is well above the 850 mark which some analysts say is necessary to turn year-on-year output negative.
The U.S. natural gas drilling rig count is still up 308, or 46 percent, since bottoming at 665 on July 17, 2009, its lowest level since May 3, 2002, when there were 640 active gas rigs.
While the gas rig count is about 39 percent off its record peak of 1,606 from September 2008, it stands 274 rigs, or 39 percent, above the same week last year.
Rising output from shale gas has been the primary driver of increased gas production in the last few years, and most traders agree it will be difficult to tighten the gas market unless shale drilling activity slows sharply.
Recent EIA estimates put U.S. gas output this year at more than 22 tcf, its highest level since 1973.
With inventories still high and 2010 gas output likely to reach levels not seen in nearly 40 years, many traders expect prices to remain on the defensive until the economy picks up.