U.S. Drilling Activity Holds Steady as Oil Rigs Fall and Gas Rigs Rise

The U.S. drilling activity remained unchanged this week at 588 rigs, according to Baker Hughes' latest data. The number is up by 52 rigs from last year, a nearly 10% increase.

However, beneath the surface, there's a notable shift in oil and gas drilling activities. Oil rigs fell by five to 447, while natural gas rigs increased by five to 132. Miscellaneous rigs remained unchanged at nine.

The jump in gas-directed drilling is particularly interesting, given relatively modest U.S. natural gas prices of around US$2.88 per MMBtu on Friday. In contrast, WTI crude was trading around US$83 per barrel, weakening sharply over the past week due to geopolitical tensions involving Iran.

Despite this, oil above US$80 continues to provide a supportive backdrop for U.S. producers, particularly in the Permian Basin. The basin added one rig this week to reach 250, although that remains below the 254 rigs operating in the basin a year ago.