US oil rig count hits 433 in seventh straight weekly rise

The number of active US oil rigs rose by two to 433 in the week ended June 12, Baker Hughes said Friday. That marks the seventh consecutive weekly increase.

Natural gas rigs fell by one to 554 over the same period.

The sustained rise in oil-directed drilling comes as US crude production holds near record levels. The Permian Basin, the country's most prolific oil field, has driven much of the recent activity. Producers there have maintained steady capital spending even as West Texas Intermediate crude has traded in a relatively narrow range this spring.

A higher rig count does not automatically translate into a proportional increase in output. New wells in the Permian are delivering lower initial production rates than wells drilled two years ago, several operators have noted in recent earnings calls. The industry is drilling more wells just to keep production flat, a dynamic that has capped the supply response from higher prices.

Still, the seven-week streak suggests that the current price environment – WTI has held above $70 a barrel for most of that stretch – is sufficient to keep the drilling program running. The question for the second half of the year is whether operators will add more rigs if prices push higher, or whether the industry has reached a natural ceiling given the tightness in the oilfield services market.

Baker Hughes releases the rig count every Friday at 1 p.m. ET. The data is a closely watched proxy for near-term supply trends in the US, the world's largest crude producer.