Baker Hughes Rigs Fall as Shale Holds Capex Line

The Baker Hughes North American rig count released Friday at 11:00 MT showed the US total active rig count at 541, down two from a week earlier and 35 fewer than the same week of 2025, according to the company's weekly report. Oil-directed rigs slipped to 414 from 415 the previous week, while gas rigs ticked down one to 127. The release lands on a day when WTI crude was trading near $97 per barrel on the CME front-month contract in afternoon trading as of approximately 13:00 MT, with Brent at $104 per barrel on ICE, prices that historically would have triggered an aggressive rig response.

The disconnect between price and drilling activity is now the dominant theme in North American upstream. WTI has gained more than 60% since late February when the effective closure of the Strait of Hormuz pushed crude past $90, yet the Baker Hughes US rig count has fallen in seven of the past eight weeks. Operators continue to flag productivity gains, longer laterals, and capital discipline as the reason cash flow is staying on balance sheets rather than going back into the ground.

Permian Holds at 242 Rigs, Down 43 Year-Over-Year

The Permian Basin reported 242 active rigs, unchanged on the week and down 43 from the same week of 2025, a 15% year-over-year decline. The Permian still accounts for approximately 58% of all US oil-directed rigs, but the absolute headcount sits below pre-pandemic levels even with crude up sharply. The Eagle Ford in South Texas reported 43 rigs, unchanged week-over-week and down three year-over-year. The Williston Basin in North Dakota and the Bakken edge added one rig to 31.

Diamondback Energy chief executive Travis Stice told analysts on a recent call that the company can deliver flat production with fewer rigs because of well productivity gains running near 8% per year. Diamondback's plan to run 30 rigs this year (down from 34 at peak) at a $97 WTI environment was characterised by RBC Capital Markets as the inflection point where the industry stopped trying to deliver supply growth at any price.

Canada Adds Three Rigs, Spring Break-Up Recovery

Canada's rig count rose by three to 117 as spring break-up ends and operators in the Western Canadian Sedimentary Basin return crews to oil sands in-situ pads and Montney gas wells. The Canadian count remains down four year-over-year but is on a recovery trajectory consistent with previous post-break-up windows. The Alberta Energy Regulator's ST-49 daily activity report has shown a steady uptick in drill-to-LD activity through Edson, Drayton Valley, and Grande Prairie field centres over the past 10 days.

What's Different Now From the Last $97 Cycle

The last time WTI traded near $97 sustainably was June 2022. The US rig count that month sat at 740, a level 36% higher than today's reading. Bank of America commodity strategist Francisco Blanch wrote in a Thursday client note seen by Bloomberg that the lack of supply response "is the single most important bullish factor in the medium-term oil outlook, surpassing Iranian supply risk in its implications." Goldman Sachs analyst Daan Struyven echoed the view in a Friday note projecting the US shale supply ceiling has moved structurally lower because operators are now optimising for free cash flow per share rather than barrels.

Wood Mackenzie head of upstream research Robert Clarke estimated in a Friday research brief that even if WTI averaged $100 per barrel through 2027, US oil production would grow by no more than 250,000 barrels per day annually, roughly one-third the response rate observed in the 2014 and 2018 cycles. The implications extend to OPEC+ planning, which depends in part on assumptions about how quickly North American shale will replace any barrels the cartel and its allies withhold.

Frac Crews and Completion Activity

Baker Hughes does not publish a frac spread count, but ProPetro Holding and Liberty Energy both reported Q1 utilization rates above 85% in their most recent earnings calls. Liberty CEO Ron Gusek said on the May earnings call that completion activity remains "more durable than the rig count would suggest" because operators are working through drilled-but-uncompleted inventory built up in 2024 and 2025. DUC inventory in the Permian has fallen by roughly 600 wells over the past six months according to EIA Drilling Productivity Report data, meaning the future completion runway is shrinking even as current activity stays elevated.

Outlook

Pioneer Natural Resources (now part of ExxonMobil), Chevron, and ExxonMobil have all signalled Permian rig counts will stay flat or slightly lower through year-end. The Diamondback ramp to 30 rigs documented in the company's recent guidance update stands out as the only major operator increase. Service-company commentary from Halliburton and SLB suggests pricing power has improved but volumes remain capped by customer capex budgets that were set at $75 to $80 WTI assumptions. The net effect: a structurally lower US supply response curve that leaves OPEC+ holding more of the marginal-barrel pricing power than at any point since 2016.