Oil and gas rig count up 54% since last year

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The number of active oil and natural gas drilling rigs in the United States rose by two this week and 267, or 54%, in the past year, an increase that comes even as oil demand — and, by extension, gas prices — has abated slightly since last month.

The numbers bring the current U.S. rig count up to 758, according to the new data, published by Baker Hughes on Friday.

The number of gas drilling rigs climbed by two, to 155, while the number of rigs targeting crude oil remained unchanged at 599. Four rigs were classified as “miscellaneous.”

The most recent rig count increases come as President Joe Biden has been forced to reverse course partially on his campaign trail pledge 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. Oil and gas production have generally increased under Biden, despite his campaign agenda, as the industry has recovered from the pandemic.

The administration has also signed off on higher LNG export volumes for several existing and pending export terminals and promised to help the Europeans acquire more gas amid fears of an abrupt cutoff in Russian supplies.

Still, some industry officials have accused the administration of not going far enough to combat the high prices, noting that energy prices accounted for nearly half of the 9.1% rise in consumer costs in June, according to a recent report from the Bureau of Labor Statistics.

Others have noted there’s no guarantee these lower prices are here to stay. “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 a recent interview.

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Gasoline demand has also decreased in recent weeks. According to data from the U.S. Energy Information Administration, U.S. gas demand stood at 8.52 million barrels per day last week — a slight uptick from the previous week’s number of 8.06 million bpd but still far below the 9.3 million bpd recorded one year earlier.

Total domestic gasoline stocks also increased by 3.5 million bbl to 228.4 million bbl, a signal that U.S. demand has abated slightly even as gasoline inventories rebound.

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Retail gasoline prices stood at a national average of $4.41 per gallon on Friday, according to AAA, dropping 16 cents from last week and 54 cents compared to the same point last month.