Oil and gas rigs in the US see third consecutive increase, according to Baker Hughes report
The U.S. oil and gas rig count has seen a notable increase, climbing to 542, its highest since July, according to data from Baker Hughes. This marks the third consecutive week of additions, as energy firms continue to expand their operations.
However, the increase in the rig count does not align with the significant drops seen in previous years. In 2023, the rig count declined by about 20%, and in 2024, it decreased by around 5%.
The U.S. Energy Information Administration (EIA) has not provided specific projections for oil and gas rig counts for 2025. Similarly, the EIA has not named the Administrator for 2025, as of the current search results.
Despite the increase in rig counts, the EIA's projected increase in crude output for 2025 is not as high as the increases in capital expenditures seen in 2022, 2023, and 2024. Independent exploration and production (E&P) companies are planning to cut capital expenditures by around 4% in 2025 from levels seen in 2024.
On the other hand, the EIA's projected increase in gas output for 2025 is significantly higher than the 4% increase in capital expenditures planned by independent E&P companies for 2025. The EIA predicts a 61% increase in spot gas output in 2025, up from 103.2 billion cubic feet per day (bcfd) in 2024 and a record 103.6 bcfd in 2023.
Gas rigs remained at 118, while oil rigs rose by two to 418, their highest since July. Despite the increase, the total oil and gas rig count is still 46 rigs lower than this time last year.
Interestingly, the EIA projected crude output would rise from 13.2 million barrels per day (bpd) in 2024 to approximately 13.4 million bpd in 2025. This projected increase in crude output is notable, considering analysts forecast U.S. spot crude prices to decline for a third year in a row in 2025.
Lower U.S. oil and gas prices over the past couple of years have led energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output. This trend may continue to influence the industry's direction in the coming years.
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