The latest data from Baker Hughes reveals that U.S. energy firms added one oil and natural gas rig in the week leading up to January 23, marking the first increase in rig count after a three-week period of declines. The current tally of 544 rigs is nevertheless 32 units fewer than the tally recorded at this point last year, representing a 5.6% decrease.
This week, the number of oil-specific rigs rose marginally by 1, reaching 411, while natural gas rigs remained steady at 122. The minimal change suggests a cautious approach to drilling activity by energy companies amid ongoing market conditions.
Over the past several years, the rig count in this sector has steadily declined. Forecasts indicate that the number of rigs will be approximately 7% lower in 2025 and 5% lower in 2024, compared to previous periods. A more significant reduction of around 20% was observed in 2023. These downward trends primarily reflect the industry's focus on enhancing shareholder value and reducing debt loads rather than aggressively pursuing increased production, particularly in light of subdued oil prices in the United States.
Looking forward, the U.S. Energy Information Administration anticipates a slight decrease in U.S. crude oil production from a peak of 13.61 million barrels per day in 2025 to an estimated 13.59 million barrels per day in 2026. This projection aligns with expectations of a continuation in declining U.S. spot crude prices over four consecutive years.