U.S. energy firms this week cut the number of oil and natural gas rigs operating for a second week in a row for the first time since mid-December, energy services firm Baker Hughes said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, fell by one to 543 in the week to January 16, the lowest since mid-December..
Baker Hughes said this week’s decline puts the total rig count down 37 rigs, or 6% below this time last year.
Baker Hughes said oil rigs rose by one to 410 this week, while gas rigs fell by two to 122, their lowest since October.
The oil and gas rig count declined by about 7% in 2025, 5% in 2024, and 20% in 2023 as lower U.S. oil prices prompted energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output.
The independent exploration and production companies tracked by financial services firm TD Cowen said they planned to keep capital expenditures flat in 2026 after cutting spending by around 4% in 2025.
That compares with roughly flat year-on-year spending in 2024, increases of 27% in 2023, 40% in 2022, and 4% in 2021.
With U.S. spot crude prices expected to fall for a fourth year in a row in 2026, the U.S. Energy Information Administration projected crude output would ease from a record 13.61 million barrels per day in 2025 to around 13.59 million bpd in 2026.
On the gas side, the EIA projected output would rise from a record 107.4 billion cubic feet per day (bcfd) in 2025 to 108.8 bcfd in 2026 even though spot prices at the Henry Hub benchmark were forecast to ease by about 2% in 2026.
(Reporting by Scott DiSavino; Editing by Chris Reese and Nia Williams)