US Lower 48 horizontal rig activity has increased by about 78 rigs since the start of 2026, supporting higher crude production growth expectations, TPH Energy Research said in a Tuesday note.
The increase includes roughly 65 oil-directed rigs and 13 gas-directed rigs, while private operators added about 83 rigs to capitalize on commodity prices.
TPH expects oil-focused activity to remain broadly flat in the near term, although some operators could increase drilling. Rig churn should limit overall net additions, the firm said.
Inventory exhaustion will eventually shape drilling activity, with faster development in 2026 pulling locations forward from later years and reducing available inventory for future production.
TPH also sees greater downside risk for 2028 activity, as softer crude fundamentals could force operators to make a sharper reduction in drilling activity, despite stronger near-term production growth.
TPH now expects US shale crude production to increase about 260,000 barrels per day in 2026, up from its previous forecast of 120,000 b/d, with the Permian contributing about 149,000 b/d versus 65,000 b/d previously.
Higher drilling activity also prompted TPH to raise its average 2026 Permian rig forecast to about 258 from 241, supporting the stronger crude production outlook.
For 2027, US shale crude production growth could accelerate to 347,000 b/d, with the Permian contributing 253,000 b/d as operators benefit from a full year of higher activity.
TPH expects production growth to slow to 95,000 b/d in 2028, although Permian crude production could still grow by 118,000 b/d, according to its estimates.
Lower 48 rigs stood at about 503 in December 2025 and 581 currently. TPH forecasts 557 rigs in 2027 and 551 in 2028.
Permian rigs stood at about 244 in December 2025 and 272 currently, while TPH expects 267 rigs in 2027 and 258 in 2028.