Oh the irony.  Lift usually means to cause something to move higher.  The oilfield’s artificial lift market exists because fluids need to be lifted from the bottom of a well.  The lift market, however, is the opposite. Have a look at the following chart, which shows the year to year change in the global artificial lift market projected through 2022:

Don’t ever fall for the argument that oil producers will always want to sustain their production operations no matter the price of oil.  Look at 2009 and at 2015/2016 to see where oil producers around the world quickly pulled the plug on production operations once the price of oil fell to uneconomic levels. 

We are projecting this for 2020 and 2021, because we can’t imagine a scenario where oil prices rise above $40 during that period. The world’s inventories are already full.

In the first days of March – back when oil was still above $40 – we were talking with production services people who had seen well repair and maintenance work drop to zero.  These were the first services to stop in this sorry downturn. Well maintenance reduction actually PRECEDED drilling reduction.

Oil output will fall fast in the US… probably faster than most people have imagined.  This rapid fall, however, will do little to impact oil prices through 2021.

I’ve been referencing our quarterly Artificial Lift Market report.  The new one is coming out in a week or two, and we’ll be sure to alert you when it’s ready.