Frac Spread Counts To Continue Steady Rise As Oil Market Rebalances

摘要

The U.S. completion market has seen a robust recovery off the bottom in 2020, with frac spreads leading the charge higher. We believed that companies wanted to limit 2020 decline curves at 10%-15% (final was about 13%), making it easier to stem declines in 2021 and get back to stable growth. The production profile has been altered, however: Instead of being in full growth mode, the U.S. energy industry had to reset and reassess the market demands and local capacity constraints. In 2018, the U.S. oil and gas market experienced broad shortages of proppant, pipe capacity, horsepower-essentially everything needed to carry out an efficient process. With domestic oil production at 13 million barrels a day and growing, U.S. refiners could not handle the deluge of light sweet crude, and as it turned out, neither could the international markets. There was not only a shortage of export capacity, but also underlying demand for U.S. product.