(Reuters) – U.S. energy firms this week cut the number of oil and natural gas rigs operating for the first time in six 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 550 in the week to February 27, the lowest since late January.
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Baker Hughes said this week’s decline puts the total rig count down 43 rigs, or 7% below this time last year.
Baker Hughes said oil rigs fell by two to 407 this week, their lowest since December, while gas rigs rose by one to 134, their highest since July 2023.
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 17 of the 21 exploration and production companies it tracks said they 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. spot crude prices expected to fall for the fourth year in a row in 2026, the U.S. Energy Information Administration projected crude output would hold at 13.6 million barrels per day in 2026, matching 2025’s record high.
On the gas side, EIA projected output would rise from a record 107.6 billion cubic feet per day (bcfd) in 2025 to 110.0 bcfd in 2026 with spot prices at the Henry Hub benchmark in Louisiana forecast to jump by about 22% in 2026.
Reporting by Scott DiSavino; Editing by Chris Reese and Nia Williams
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