U.S. energy firms this week cut the number of oil and natural gas rigs operating for the first time in three weeks, 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 552 in the week to March 20, the lowest since early March.
Baker Hughes said this week’s decline puts the total rig count down 41 rigs, or 7% below this time last year.
Baker Hughes said oil rigs rose by two to 414 this week, their highest since mid-December, while gas rigs fell by two to 131, their lowest since early February, and miscellaneous rigs fell by one to seven.
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.
Financial services firm TD Cowen said the 18 exploration and production companies it tracks planned to spend about 1% less in capital expenditures in 2026 than in 2025.
That compares with a decline of around 4% in 2025, roughly flat year-on-year spending in 2024, and increases of 27% in 2023, 40% in 2022, and 4% in 2021.
With U.S. West Texas Intermediate spot crude prices expected to rise in 2026 for the first time in four years due to the U.S.-Israeli war with Iran, the U.S. Energy Information Administration projected crude output would climb from a record 13.59 million barrels per day in 2025 to 13.61 million bpd in 2026.
On the gas side, the EIA projected output would rise from a record 107.7 billion cubic feet per day in 2025 to 109.5 bcfd in 2026 with spot prices at the U.S. Henry Hub benchmark in Louisiana forecast to climb by about 7% in 2026.
(Reporting by Scott DiSavino; Editing by Nia Williams)