Baker Hughes reported that the US oil rig count fell to 407 from 409. The change is a drop of 2 rigs compared with the previous count.
The slight dip in the US oil rig count to 407 indicates a potential tightening of future American supply. This continues a pattern of capital discipline from producers that we saw for most of 2025. This small change adds to a growing bullish sentiment in the market.
Supply Demand Signals
This week’s data is more significant when viewed alongside the latest Energy Information Administration report, which showed an unexpected draw of 2.5 million barrels from commercial crude inventories. Recent data also shows global demand is exceeding earlier forecasts, with consumption in Asia growing by over 1.2 million barrels per day compared to this time last year. This suggests the supply and demand balance is becoming increasingly delicate.
In response, we should consider taking on more bullish positions in crude derivatives for the coming weeks. Buying near-term call options on WTI futures, specifically for the April 2026 contracts, offers a direct way to profit from a potential price increase. The market may be under-appreciating the lack of a quick supply response from US shale.
The recent OPEC+ decision to hold current production cuts through the second quarter further solidifies a price floor and removes significant supply. This action, coupled with sluggish non-OPEC production growth, could lead to increased price volatility. Therefore, using bull call spreads could be an effective strategy to manage risk while positioning for a moderate price rally.
We saw a similar situation developing in the fall of 2025 when a stagnant rig count, despite firming prices, preceded a sharp spike in WTI crude to over $90 per barrel. That rally was fueled by a series of larger-than-expected inventory draws. These early signals suggest history may be repeating itself, pointing towards a market that is tighter than current prices reflect.
