The Daily: Is US Oil Production About to Accelerate?

Research evidence excerpt

The Daily: Is US Oil Production About to Accelerate?

Economics

The Daily — June 9, 2026

As you can see in the chart below, there has been a modest pick-up in total rig counts over Economist(s)

the past several weeks, indicating a recent increase in drilling activity following the start

of the Iran war and the ensuing rise in oil prices. Elevated oil prices tend to act as incentive Tom Porcelli

for producers to ramp up production. So, is that what’s happening here? Chief Economist | Wells Fargo Economics

Tom.Porcelli@wellsfargo.com | 212-214-6422

The answer is actually a bit nuanced. Yes, oil drilling activity is improving (even if just Charlie Dougherty

around the margins). But producers do not appear to be aggressively ramping up future Senior Economist | Wells Fargo Economics

production plans. Charles.Dougherty@wellsfargo.com | 212-214-8984

One piece of evidence for this is that the recent gain in rigs has been driven almost

entirely by directional rigs, with horizontal rig counts remaining essentially flat. This is

important because horizontal rigs dominate in the shale basins (e.g., Permian, Bakken, and

Eagle Ford) where the vast majority of new production is concentrated. If production were

about to inflect meaningfully higher (setting aside improving drilling efficiency and new

well productivity), it would very likely be preceded by a rise in horizontal rigs.

Total Active Rotary Rigs

Not Seasonally Adjusted

640 640

620 620

600 600

580 580

560 560

540 540

520 520

Jan-24 May-24 Sep-24 Jan-25 May-25 Sep-25 Jan-26 May-26

Source: Baker Hughes Incorporated and Wells Fargo Economics

This all begs the question: why are we not seeing a more significant breakout in

activity? The answer to that is the chart below. The crude oil futures market remains in