The Baker Hughes weekly report notes a minor increase in oil rigs, now at 411. In contrast, the count for gasoline rigs decreased by one, bringing the total to 123.
Overall, the total number of rigs fell by one to 539. Meanwhile, the price of oil has nudged upwards by $0.10, now trading at $63.98.
Price Below Moving Average
This price continues to linger below the 100-day moving average, recorded at $64.89. Consequently, the daily moving averages maintain a bearish tendency as the weekend approaches.
The slight increase in the oil rig count to 411 suggests producers are not rushing to add new supply at current prices. With oil remaining below its 100-day moving average of $64.89, the technical picture remains bearish. This combination of stagnant production activity and weak price momentum points towards a market that is either well-supplied or facing demand concerns.
We are also seeing recent signs of slowing demand, which reinforces a cautious outlook for the coming weeks. The latest U.S. Energy Information Administration (EIA) report published on August 6, 2025, showed a surprise build in crude oil inventories of 2.1 million barrels, against expectations of a draw. This signals that consumption is not keeping pace with supply, a common trend as the summer driving season winds down.
Trend of Capital Discipline
Looking back, this low rig count is part of a larger trend of capital discipline we have seen from producers since 2024. For perspective, the current count of 411 rigs is significantly below the levels of around 500 rigs that were active throughout much of 2023. This historical data suggests that producers are committed to shareholder returns and will not quickly ramp up drilling even if prices see a small bump.
Given this context, derivative traders may consider strategies that benefit from a range-bound or declining oil price. Buying put options with strike prices in the low $60s could protect against or profit from a further drop in prices. Selling out-of-the-money call credit spreads above the $65 resistance level could be another viable strategy, designed to collect premium as long as the price of oil does not stage a significant rally.
