The number of active US natural gas drilling rigs fell by two this week, while oil rigs edged higher, signalling a continued shift in drilling activity amid evolving market conditions. The total rig count, a closely watched indicator of future production, now stands at 585, according to data from Baker Hughes, with natural gas rigs at 98 and oil rigs at 485.
The decline in natural gas rigs comes as producers respond to persistently low gas prices, which have made new drilling less economical in many shale basins. Meanwhile, the modest increase in oil rigs suggests that crude-focused operators remain comparatively more optimistic, supported by stronger global demand and recent price stability. The divergence highlights the growing split between the two segments of the US upstream industry.
Industry analysts note that the natural gas rig count has been under pressure for much of the year, as oversupply and mild winter weather have weighed on prices. The recent drop brings the gas rig count to its lowest level in several weeks, reflecting a cautious approach by exploration and production companies. Many operators have shifted capital towards oil-rich plays and higher-return projects, leaving gas-directed drilling in a secondary position.
The oil rig increase, while small, points to a stabilisation in crude drilling after a period of volatility. US crude production remains near record levels, and the additional rigs suggest that some producers are willing to expand activity in select basins where costs are lower and well productivity is proven. However, the overall pace of additions remains restrained, with many companies prioritising shareholder returns over output growth.
The rig count data is released weekly by Baker Hughes and is considered a leading indicator of future US energy output. Changes in the count are driven by a range of factors, including commodity prices, drilling costs, and company budget decisions. The latest figures come ahead of upcoming inventory reports and Federal Reserve policy signals, which could influence energy markets in the near term.
For the broader economy, the divergence in drilling activity carries implications for energy supply and prices. Lower natural gas rig counts could eventually tighten gas markets, supporting prices for consumers and industrial users. In contrast, sustained oil drilling supports domestic crude output, which helps moderate global oil prices and reduces reliance on imports. The balance between these trends will be shaped by weather patterns, export demand, and the pace of economic growth in key markets.