Rig Count Pushes Higher
U.S. energy firms added drilling rigs for the fourth straight week, marking the longest streak since February, according to Baker Hughes.
The total rig count — an early indicator of future production — increased by 7 to 549 in the week ending September 26, the highest since June.
- Oil rigs: up 6 to 424 (highest since July).
- Gas rigs: down 1 to 117 (lowest since July).
Capital Discipline Still in Play
Rig activity has been subdued compared to past cycles. The count fell about 5% in 2024 and 20% in 2023, as producers prioritized shareholder returns and debt reduction over aggressive drilling.
Independent E&P companies tracked by TD Cowen plan to cut 2025 capital expenditures by 4%, following flat spending in 2024 and a series of major increases earlier in the decade.
Outlook: Higher Output Despite Lower Prices
Even as analysts forecast U.S. crude prices to fall for a third straight year in 2025, the EIA projects output will rise:
- Crude oil production: expected to climb from a record 13.2M bpd in 2024 to 13.4M bpd in 2025.
- Natural gas production: projected to hit 106.6 bcfd in 2025, up from 103.2 bcfd in 2024.
The rebound is partly tied to an expected 61% increase in spot gas prices in 2025, which should spur producers to ramp drilling after a 2024 slowdown.
WSA Take
The latest rig data shows U.S. producers are slowly leaning back into growth — but on their own terms. Capital spending cuts underscore a continued focus on discipline and profitability, not just pumping barrels.
Still, with the EIA projecting record oil and gas output in 2025, the U.S. remains the swing player in global energy markets. Investors should watch how pricing and political dynamics — including tariffs and energy policy shifts — intersect with this cautious production climb.
If you missed our recent coverage of OpenAI’s trillion-dollar infrastructure push, it’s another example of how massive capital cycles — from tech to energy — are reshaping markets. For more analysis, visit the Wall Street Access homepage.
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