Later today, oil services and technology company Baker Hughes will release its U.S. rig count, which is the tally of active oil rigs in the country. Since the spring, rig count has declined, reaching lows — at around 420. That’s similar to 2021 when the pandemic was still crippling oil demand. So what’s going on now?

The towering steel rigs used to drill oil and gas wells cost producers tens of millions of dollars.

“We have about 40 fewer rigs drilling today than we did a quarter ago and a year ago,” said Dan Pickering with Pickering Energy Partners.

The reason why?

“Oil prices today are in the kind of mid-60s, $60, $65 a barrel,” Pickering said. “And a few months ago and a year ago, they were higher.” 

Prices are what drive industry investment, said Rice University’s Mark Finley.

“And typically, what happens is you'll see a move in the oil prices, and then a few weeks later you'll see the rig count begin to change in response to that,” Finley said. “And then a few weeks after that, you'll begin to see production change in response.” 

As far as why prices today are lower, that has a lot to do with ample global oil supply said Abhi Rajendran with Energy Intelligence.

“You've had kind of a steady monthly increase in production from OPEC, so as demand has risen, even with some of the economic and other uncertainties, you know, you've pretty much had OPEC+ supply that demand,” Rajendran said.

He predicts US oil production — which is at a record high — will decline slightly in 2026.