Natural gas rigs rise to their highest level in 16 months
July 21, 2025
The Baker Hughes Rig Count had oil rigs down by 2 to a total of 422 and last year at this time there we 477 oil rigs in operation. US production has been falling but still above 13 million bpd per day. Here are the last several weeks of the DOE production numbers. 6-20-2025 13.435 million barrels per day, 6-27-2025 13.385 million, 7-4-2025 13.385, and this past week 13.375.
Markets are cautious as there is still a lot of uncertainty around US trade policy or more specifically tariffs. Everyday seems like it does or can bring a new adventure.
We don’t spend much time on natural gas here, but it seems noteworthy that natural gas rigs have risen to their highest level in 16 months as the industry responds to the rise in prices over the last year and the outlook that LNG exports will continue to grow.
The European Union passed a round of sanctions on Russia. These latest sanctions target 105 tankers that are part of the Shadow Fleet that has been moving Russia’s crude oil and avoiding the groups price cap. The EU approved a lower price cap for Russian crude oil 15% below market price. If is suspected that Russia’s crude oil has been moving with the help of this Shadow Fleet at near market prices. There are reports that there are another 444 ships that are part of this fleet that will not be sanctioned. The markets, because of these additional vessels, have pretty much shaken off this news after rallying on Friday to cover any risks.
For crude oil and distillates, the markets have begun to look more at the fundamentals that say these two items stock levels are concerning. If the new EU sanctions or other issues arise that disrupt supplies these two products would fill the pinch and prices could trade higher. This of course is barring any negative economic impact from tariffs that derail the economy and energy demand with it.