Fed Reverse Repo Usage Plummets as US Oil Rig Count Declines

By / / Breaking News

Key Takeaways

  • The Federal Reserve's overnight reverse repurchase (ON RRP) facility saw a significant drop in usage, with 21 counterparties taking $97.426 billion on August 1, 2025, a sharp decrease from $214.445 billion previously.
  • The total U.S. rig count, as reported by Baker Hughes (BKR), fell to 540, down from 542 in the prior week, indicating a continued contraction in overall drilling activity.
  • U.S. oil rigs decreased by 5 to 410, marking a decline from the previous count of 415, suggesting a pullback in crude oil exploration and production efforts.
  • Conversely, U.S. gas rigs experienced a slight increase, rising by 2 to 124 from 122 previously.

The Federal Reserve's overnight reverse repurchase (ON RRP) facility experienced a notable decline in demand on August 1, 2025. A total of 21 counterparties utilized the facility, drawing $97.426 billion. This figure represents a substantial decrease from the previous operation, which saw 52 bids for $214.445 billion. The reduction in reverse repo usage can indicate various market dynamics, including a decrease in liquidity held by financial institutions or a shift in their preferred investment avenues.

In the energy sector, the latest Baker Hughes (BKR) rig count for the U.S. revealed a continued softening in drilling activity. The total number of active rigs in the United States decreased to 540 as of August 1, 2025, down from 542 in the preceding week. This reflects a broader trend, as the U.S. rig count has been decreasing, with the total count down 47 rigs, or 8%, compared to the same period last year.

Specifically, the U.S. oil rig count fell by 5 to 410 from 415 previously. This marks a significant drop, with oil rigs at their lowest level since September 2021. The decline in oil drilling activity is an important barometer for future crude oil production and can influence market sentiment regarding supply.

In contrast to the oil sector, the number of U.S. gas rigs saw a modest increase, rising by 2 to 124. This is up from 122 in the prior week, reaching its highest level since August 2023. The divergent trends between oil and gas rig counts highlight differing supply-demand dynamics and investment priorities within the hydrocarbon industry.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. We are not financial professionals. The authors and/or site operators may hold positions in the companies or assets mentioned. Always do your own research before making financial decisions.
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