North America’s energy sector is showing early signs of renewed momentum as drilling activity continues to climb for a third straight week. The latest data indicates that both the United States and Canada have seen modest increases in rig counts, suggesting a gradual return of confidence among upstream operators.
Drilling Activity on the Rise
The total number of active rigs across North America has risen to 749, with 550 operating in the United States and 199 in Canada. Although the weekly increase is modest—two additional rigs in the U.S. and one in Canada—it marks a steady upward trend following months of relative stagnation.
In the U.S., the breakdown shows 420 rigs targeting oil, 121 drilling for natural gas, and 9 categorised as miscellaneous. Land-based rigs continue to dominate the landscape, accounting for nearly all U.S. activity, while offshore and inland water rigs make up a small fraction of the total.
On a year-over-year basis, however, the region remains down by 52 rigs overall, highlighting that the market is still in recovery mode following a subdued period for exploration and production investment.
Why the Uptick Matters
Even slight increases in rig counts can be meaningful indicators of shifting sentiment in the energy market. Rising counts often signal improved fundamentals—such as firmer commodity prices, easing supply chain constraints, or renewed investor confidence in the upstream sector.
For drilling contractors, service companies and equipment suppliers, a consistent upward trajectory could translate into higher utilisation rates, improved margins and a stronger pipeline of work heading into 2026.
A Cautious Recovery
Despite the recent gains, analysts caution that the scale of the increase remains small. Rig counts can fluctuate due to temporary factors like maintenance, weather disruptions, or project timing rather than sustained demand growth.
The overall count remains well below 2024 levels, and the industry continues to navigate cost pressures, regulatory uncertainty, and capital discipline among major producers. Many operators remain focused on efficiency—doing more with fewer rigs—rather than ramping up activity aggressively.
What to Watch Next
- Trend durability: Continued weekly gains will confirm whether the current rebound has real momentum.
- Regional activity: Tracking where rigs are being added—particularly in shale hot spots such as the Permian, Bakken, and Montney basins—will reveal where operators see the strongest returns.
- Completions and production: Future output data will show whether these new rigs are translating into measurable supply growth.
- Service-sector response: A rise in rig utilisation typically leads to more demand for field crews, fracking equipment, and well-completion services.
Outlook
The third consecutive weekly increase in rig activity offers a small but notable boost for the North American energy landscape. While it is too early to declare a full-scale recovery, the upward trend reflects a measured optimism returning to the oil and gas sector.
If these gains continue into the final quarter of the year, it may signal that the market has turned a corner—marking the early stages of a more stable, sustainable phase of growth for North America’s upstream industry.