U.S. energy firms this week added the most oil rigs since November, and the most in a month since October 2022, energy services firm Baker Hughes said in its closely followed report on Feb. 23.

The combined oil and gas rig count, an early indicator of future output, rose by five to 626 in the week to Feb. 23, its highest since August 2023. 

Despite this week's rig increase, Baker Hughes said the total count was still down 127, or 17% below this time last year.

Baker Hughes said U.S. oil rigs rose by six to 503 this week, while gas rigs fell one to 120, their lowest since Feb. 2.

For the month, the total rig count rose by five, the biggest increase since November 2022, while separately, the oil rig count was up by four and the gas rig count rose one.

The U.S. oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused more on paying down debt and boosting shareholder returns instead of raising output.

U.S. oil futures were up about 7% so far in 2024 after dropping by 11% in 2023. U.S. gas futures, meanwhile, were down more than 35% so far in 2024 after plunging by 44% in 2023.

Some gas producers said they would slash spending and reduce drilling activity following a sharp drop in prices to a 3-1/2-year low in recent weeks. Analysts, however, noted those rig reductions may not show up in the data for a few months.

Despite lower prices, spending and rig counts, U.S. oil and gas output was still on track to hit record highs in 2024 and 2025 due to efficiency gains and as firms complete work on already drilled wells.

The total number of drilled but uncompleted wells remaining dropped to a record low of 4,386 in January, according to federal energy data going back to December 2013.