The number of active oil and natural gas drilling rigs in the United States rose by four this week and 272, or 56%, in the past year to the highest point since March 2020, an increase that comes even as oil demand — and by extension, gas prices — have abated slightly since last month.
The new numbers bring the total U.S. rig count up to 756, according to data published by Baker Hughes on Friday.
Gas demand also dropped last week, according to new data from the Energy Information Administration, down from 9.41 million barrels per day to 8.06 million barrels per day, while gas stocks increased by 5.8 million bbl.
Retail gasoline prices have eased slightly since last month, settling Friday at a national average of $4.57 per gallon, according to AAA, a 43-cent decline since June, when prices soared to an all-time high of $5.01 per gallon.
Oil prices were trending slightly up on the day, with futures for international benchmark Brent Crude trading at $101.13 per barrel as of Friday afternoon, up by $2.03, while futures for U.S.-based West Texas Intermediate stood at $97.61 per barrel, an increase of $1.93.
The new rig count comes as President Joe Biden has been forced to reverse course partially on his campaign trail pledges to crack down on fossil fuels. In recent months, Biden has urged oil and gas companies to ramp up domestic production, seeking to combat soaring prices for consumers and a spike in demand amid Russia’s war in Ukraine.
Still, industry officials have accused the administration of not going far enough to combat the high prices. In particular, they have taken aim at a new offshore drilling proposal released earlier this month that would allow up to 11 new oil and gas lease sales in the Gulf of Mexico and one off of the Alaska coast.
Energy costs for U.S. consumers increased 41.6% in June compared to the same point last year, according to a new report released this week from the Bureau of Labor Statistics.
Still, there’s no guarantee that oil and gas prices are headed down for the long term. “While the price of oil has declined on easing global demand, it would not take much to cause a reversal and send those prices back up and inflation higher with it,” chief RSM economist Joe Brusuelas told the Washington Examiner in an interview this week.