A pumpjack in front of the the Covia-Kermit Plant outside of Kermit, Texas on Wednesday, April 29, 2020.

The U.S. rig count is up again this week as companies continue with planned production increases, and demand for petroleum products remains high as pandemic recovery continues.

The number of operating drill rigs rose nationally to 740 this week, according to oil field services company Baker Hughes. Oil and gas companies have added 270 rigs in the past year, a 57 percent increase from the 470 operating this time last year.

The Department of Energy predicts oil will sit above $100 through the end of the year, and will likely remain in the high $90s through 2023. Oil prices were already recovering from the pandemic this year, but Moscow’s invasion of Ukraine pushed them up even more as countries sanctioned Russian oil and gas, tightening global oil supplies that already couldn’t keep up with surging demand from pandemic recovery. 

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As a result, Americans are paying record high gasoline prices and in some cases are seeing their utilities bills double. U.S. officials have been calling on companies to increase domestic production in hopes of easing prices, including a public back and forth between President Joe Biden and Houston-based oil supermajor Exxon Mobil. 

Analysts have said that while companies are working to increase production overall this year, they’re sticking to planned increases instead of quickly ramping up output. Investors have been pushing companies to exercise more discipline when it comes to spending, and companies have remained focused on returning money to shareholders instead of changing drilling plans. 

Additionally, the war and uneven pandemic recovery have also caused snags in the global supply chain, making it harder for oil and gas drilling companies to get some needed supplies.

Still, experts predict oil and natural gas production in the Permian Basin of West Texas and New Mexico will hit records this year. The U.S. benchmark for oil, West Texas Intermediate, was trading around $111 Friday afternoon, down from $120 this time last week. 

Kyra Buckley is an energy reporter for the Houston Chronicle.

Kyra specifically covers the region's oil and gas companies, focusing on drilling and oil field services. Before joining the Chronicle's business desk in April 2022, Kyra covered energy at Houston Public Media for two years. She previously worked at NPR member stations in Colorado and Oregon, and is a 2015 graduate from the University of Oregon in journalism and political science.

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