U.S. Oil Rigs Increase Amid Industry Shift
The U.S. oil industry saw a fifth consecutive weekly increase in active rigs, marking the first such streak since May 2022, according to Baker Hughes.
- Oil and gas rigs rose by one, reaching 593 total rigs—the highest level since June.
- The oil rig count fell by two to 486, while gas rigs increased by three to 102.
- February saw a net gain of 11 rigs, the largest monthly increase since November 2022.
“Despite recent gains, total rig counts remain 6% below last year’s levels,” noted Baker Hughes analysts.
Long-Term Drilling Decline Continues
Even with short-term increases, the oil and gas industry remains focused on capital discipline rather than production growth.
- 2024 rig counts fell by 5%, following a 20% decline in 2023.
- Lower oil and gas prices over the past two years have pushed companies to prioritize shareholder returns.
- TD Cowen reports that 22 independent E&P firms plan to cut spending by 1% in 2025, a shift from past years.
Industry Spending Trends
Oil firms have adjusted their investment strategies over recent years:
- 2025 forecast: Spending down 1% from 2024.
- 2024: Spending remained flat year-over-year.
- 2023: Spending increased 27%.
- 2022: Spending surged 40%, fueled by high oil’s prices.
- 2021: Spending rose 4% post-pandemic recovery.
“The focus remains on cost control rather than aggressive expansion,” analysts at TD Cowen said.
What’s Next for U.S. Oil Production?
The recent rig count increase suggests potential production growth, but the industry’s long-term focus on efficiency and financial stability is reshaping traditional drilling strategies.
- Energy firms remain cautious, balancing capital spending with debt reduction.
- Market conditions, oil‘s prices, and global demand will influence future drilling activity.
- OPEC+ production decisions and U.S. economic policy could impact investment trends.
With uncertainty in global energy markets, U.S. producers will likely maintain a disciplined approach, even as rig activity gradually rebounds.