U.S. energy companies cut the number of active oil and natural gas rigs for a second week in a row, according to data released Friday by energy services firm Baker Hughes. For the week ending April 17, the total rig count fell by two to 543, the lowest reading since late March.
The current nationwide rig tally is 42 rigs, or 7%, below the total at the same time last year. The weekly change included a one-rig decline in oil-directed activity, which fell to 410 rigs - the lowest oil rig count since late March. Natural gas-directed rigs were down by two to 125, a level not seen since January. Miscellaneous rigs edged up by one to eight.
Industry-wide rig activity has trended lower this year, with the count down 7% in 2025 so far. That follows a 5% reduction in 2024 and a larger 20% fall in 2023. The data point to a sustained pullback in upstream drilling after several years of fluctuating capital deployment.
Lower U.S. oil prices are cited as a primary driver behind producers' changing priorities. Energy companies have been placing greater emphasis on returning cash to shareholders and paying down debt instead of expanding production capacity, the Baker Hughes release noted. This shift in allocation preferences has coincided with gradual reductions in drilling activity.
On capital spending, TD Cowen reported that the exploration and production companies it tracks are planning a roughly 1% reduction in capital expenditures for 2026 versus 2025. That planned cut follows a 4% decrease in 2025, after flat spending in 2024. By contrast, E&P capital outlays increased substantially in prior years - rising 27% in 2023, 40% in 2022, and 4% in 2021.
The combination of lower rig counts and modest planned capex reductions signals a cautious posture among U.S. producers as they balance financial priorities. The near-term data do not specify how long the current two-week decline in rigs may continue, leaving the trajectory of activity dependent on future market conditions and corporate decisions.
Data source: Baker Hughes weekly rig count; TD Cowen capex plans as reported in the same release.