U.S. rig count climbs five as crude prices rally; Permian adds two

Drilling activity in the U.S. oil patch is expanding again as crude prices grind higher, with Baker Hughes reporting a net increase of five active rigs in the latest weekly count. The Permian Basin, the country's busiest oil-producing region, led the way with two additional rigs, bringing its total to 265 — 10 more than a year ago.

Nationally, the combined oil and gas rig count rose to 593 for the week ended Friday, up from 539 rigs at this time last year. The tally showed 455 rigs drilling for oil, one more than in the previous week, and 128 rigs targeting natural gas, an increase of four. The number of miscellaneous rigs was unchanged at 10.

The Baker Hughes data are widely viewed as a leading gauge of future U.S. energy production. Current activity remains far below the all-time high of 4,530 rigs recorded in 1981, but it has recovered steadily from the industry's pandemic-era low of 244 rigs in August 2020.

Rising crude prices have helped support the turnaround. The regional Plains West Texas Intermediate Posting benchmark ended Friday at $78.88 a barrel, up $4.22 from the prior Friday, while the national West Texas Intermediate benchmark closed at $82.40 a barrel, also up $4.22 on the week.

Operators are approaching the latest cycle with more discipline than in previous booms. Shareholders have pushed exploration and production companies to prioritize free cash flow over aggressive output growth, and persistently higher costs for steel, diesel, and labor have raised the bar for new drilling projects. Still, with WTI comfortably above $80, many analysts expect a modest, gradual expansion in rig activity, particularly in the Permian, where established infrastructure and multi-well pad sites make it cheaper to bring new supply online.