I saw a friend this week – a veteran oilfield service hand, working for one of the biggest service companies.

“How’s business?,” I asked.

“No more Styrofoam cups, and we’ve gone to one-ply toilet paper,” he stated.

Ouch! Now THAT is cost cutting.

That was the same day I watched COVIA present numbers about active frac crews in the US: Just over 400 back in the summer, just under 300 at the end of Q3. My bet is that the period of Thanksgiving to Christmas will see under 200 frac crews catching jobs across the US.

200 frac crews while oil prices bounce between $55 and $60!

Perhaps there is a parallel universe out there where oil output increases while frac activity decreases, but in the known world I don’t see how investors, oil traders, government agencies, and the average man-on-the-street can expect oil output to keep rising while those who create the oil are doing far less.

At this writing, Spears & Associates expects the US land frac market to be $22B in 2019, falling to $20B in 2020.  That 2020 forecast was prepared a couple months ago when times were happier.  

Perhaps we should recalibrate to $18B in 2020?  Lower?

PS The 2016 US land frac market was $10B (for those who are curious).