Looking at the chart for the price of West Texas Intermediate (WTI) crude oil for Friday, January 30, we see the closest thing we have seen in months to the much-loved “hockey-stick” profile. The price of WTI was up about 1.7% on the day at around noon. By 4 o’clock it was up 7%, after touching a top of 8% in the mid-afternoon. Did the Saudis stop pumping crude? Did Tesla go out of business?

Nope. The spike to a settlement price of more than $48 a barrel is a bet on the future primarily based on the number of oil rigs that were idled last week. We noted Friday that the U.S. oil drilling rig count fell by 94 in the week ended Friday, and the total number of rigs looking for oil in the United States now stands at 1,223. The number will get smaller.

According to oil industry research firm RBN Energy, the rig count at more than a dozen onshore drilling companies will drop by a total of 42% in 2015, from a total of 221 in 2014 to a total of 128. All these companies operate primarily in shale plays, and combined they are expected to spend 28% less on capital projects in 2015 than they spent in 2014.

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The part of the story that Friday’s oil buyers might have missed is that crude oil production from these same companies is expected to increase by 10%, even though fewer rigs will be doing the work. Daily production is projected to climb from 606,000 barrels of oil equivalent a day to 669,000 barrels.

In mid-June of 2009, at the bottom of the Great Recession, the U.S. rig count dropped to a low of 876. There were 36 rigs in North Dakota in mid-2009, compared with 143 today. Rig counts are unlikely to fall that far again, and even if they do, oil production will be higher because horizontal drilling and hydraulic fracking played almost no role in 2009 production as they do today.

Rig counts are an important sign of the energy industry’s strength, but the meaning has changed. The count means less in terms of production than it did before shale drilling became popular. The count does mean something about jobs and employment though, and that is where the pain will be in the next year or so.

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