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AMERICAS OIL: US Oilfield Firms Face Pricing Squeeze as Fracking Demand Slumps

AMERICAS OIL
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US Oilfield Firms Face Pricing Squeeze as Fracking Demand Slumps: Reuters

  • Top US oilfield firms are facing weaker pricing and revenue this year as oil producers become more efficient and keep a cap on spending, according to executives and analysts.
  • US producers are pumping record amounts of oil but using fewer rigs to do so after the pandemic crushed prices and spurred a boom in company mergers and new efficiencies.
  • The number of oil rigs has fallen to its lowest since December 2021 according to Baker Hughes. In the Permian, the rig count is at its lowest since February 2022.
  • This year, operators face weaker crude price forecasts due to oversupply. Roughly half the Texas and New Mexico-based oil executives surveyed by the Dallas Fed in December said they were using $70-$75/bbl for capital planning.
  • Land rig day rates are set to end the year at their lowest since 2Q of 2022 according to Rystad Energy. As a result, oilfield firms face rising debt and more bankruptcies. 
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US Oilfield Firms Face Pricing Squeeze as Fracking Demand Slumps: Reuters

  • Top US oilfield firms are facing weaker pricing and revenue this year as oil producers become more efficient and keep a cap on spending, according to executives and analysts.
  • US producers are pumping record amounts of oil but using fewer rigs to do so after the pandemic crushed prices and spurred a boom in company mergers and new efficiencies.
  • The number of oil rigs has fallen to its lowest since December 2021 according to Baker Hughes. In the Permian, the rig count is at its lowest since February 2022.
  • This year, operators face weaker crude price forecasts due to oversupply. Roughly half the Texas and New Mexico-based oil executives surveyed by the Dallas Fed in December said they were using $70-$75/bbl for capital planning.
  • Land rig day rates are set to end the year at their lowest since 2Q of 2022 according to Rystad Energy. As a result, oilfield firms face rising debt and more bankruptcies.