When the oilfield collapses into the dumpy part of the business cycle, companies quit building new tools and new rigs and, instead, start cannibalizing idle gear stacked out by the fence – frac trucks, mud motors, top drives, coiled tubing units, logging tools…  As a result, the oilfield market segment we call “Unit Manufacturing” falls harder than any other oilfield market segment.  When our Oilfield Market Report comes out in a week or two, Unit Manufacturing will look like this, now that we’re in a new dumpy part of the cycle:

I thought about this while hanging out with a bartender in Nashville earlier this week.  She said that they had run out of Jack Daniels the day before.  Why?  How?  She said, “Hey, look around! It is happening everywhere because of, you know, COVID.” 

And that made me remember that this summer my son couldn’t buy a tire pump for his bike, I couldn’t find an e-bike my size, Amazon couldn’t fulfill my spare alternator belt order, the Mercedes lot in Tulsa is almost empty, and don’t try to install a movie room before Spring 2021.  Because of, you know, COVID.

Here’s two distantly related take-aways:

CHRISTMAS:  Good luck finding stuff this year.  If there was ever a year to shop early, this is it.

UP-CYCLE:  When the oilfield dials up, will CAT have alternator belts?  Will non-mag steel for MWD tools be available?  Will barite show up on barges? 

I suppose it is a good thing that we are in cannibalization mode right now while the rest of the world can’t get parts.  Imagine the challenge the oilfield will have when the industry wakes up.