Key Highlights

• The total US oil and gas rig count rose by 7 to 580 for the week ending July 2, its highest level since May 2025.

• Oil rigs increased by 5 to 445, while gas rigs rose by 1 to 126, both reaching their highest counts in over a year.

• The total rig count now stands 41 rigs, or 7.6 percent, above the same period last year.

• The EIA projects crude output will rise to a record 13.7 million barrels per day in 2026, up from 13.6 million in 2025.

Third Consecutive Weekly Increase Reaches Multi-Month High

US energy firms added rigs for a third consecutive week, according to Baker Hughes, with the total oil and gas rig count rising by 7 to 580 for the week ending July 2. This marks the highest rig count since May 2025, suggesting sustained upward momentum in drilling activity following a period of decline in prior years.

Baker Hughes released the report a day earlier than its usual schedule due to the observed July 4th holiday. The firm noted that the current rig count stands 41 rigs, or 7.6 percent, above the level recorded at this time last year, indicating a meaningful year-over-year expansion in drilling activity across the sector.

Both Oil and Gas Segments Show Coordinated Growth

The rig count increase was broad-based across energy segments. Oil rigs rose by five to 445, reaching their highest level since late May 2025, while gas rigs increased by one to 126, marking their highest count since mid-May 2026. Miscellaneous rigs also rose by one to nine.

This simultaneous growth across both oil and gas categories suggests energy firms are responding to improving conditions across multiple parts of the sector rather than concentrating activity in a single fuel type. The pattern follows several years of rig count contraction, with the total count declining 7 percent in 2025, 5 percent in 2024, and 20 percent in 2023, as lower crude prices had previously prompted companies to prioritize shareholder returns and debt reduction over expanding output.

Production Forecasts Point to Sustained Growth Through 2026

The recent rig count increases align with broader production forecasts from the US Energy Information Administration. The agency projects crude output will rise to a record 13.7 million barrels per day in 2026, up from 13.6 million barrels per day in 2025, reversing a decline pattern that had persisted through 2023, 2024, and into 2025. This shift is tied in part to expectations that WTI crude prices will rise in 2026 following supply disruptions linked to the Iran conflict.

On the natural gas side, the EIA projects an even more pronounced increase, with output expected to climb from a record 107.7 billion cubic feet per day in 2025 to 111.0 billion cubic feet per day in 2026. This growth is attributed to rising demand for gas-fired electricity generation to support power-intensive data centers, alongside continued growth in liquefied natural gas export volumes. Whether rig count growth continues at its current pace is likely to depend on how sustained these price and demand dynamics prove through the remainder of the year.

Conclusion

The third consecutive weekly rise in US rig counts, reaching a 14-month high, reflects an energy sector responding to improving price conditions and demand fundamentals across both oil and natural gas segments. The alignment between rising rig activity and the EIA's record production forecasts for 2026 suggests the current drilling trend may continue if underlying price and demand conditions hold. The sector's trajectory through the remainder of the year is likely to remain closely tied to developments in global oil supply dynamics and growing gas demand from data centers and LNG exports.