EIA Says Lower Rig Count Due to Increased Drilling Efficiency

The average number of active oil and natural gas rigs in the U.S. Lower 48 dropped sharply from 750 in late 2022 to 517 in October 2025, driven by lower prices and efficiency improvements. Despite this 31% decline, crude oil and natural gas production reached record highs as operators focused on the most productive areas, utilizing longer lateral lengths and advanced completion techniques. The Permian and Marcellus/Utica (Appalachia) regions exemplify this, with production growing significantly even as rig counts fell by 29%. For 2026, EIA forecasts a slight decline in oil production, constrained by lower WTI prices (predicted at $51/barrel). Natural gas output, however, is expected to increase slightly, supported by rising Henry Hub prices (predicted at $4.02/MMBtu) that will encourage gas-directed drilling.

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