There is no question that as the oil price dropped in the first quarter of 2020, producers reacted strongly curtailing new drilling, and actually shutting in existing production. Markets have taken encouragement from this withdrawal of supply and helped prices for WTI (the key U.S. benchmark) to a rally of historic proportions.

As the price of WTI crested $30/bbl concerns began to mount that this would embolden drillers to put a bunch of rigs in the field and resume their ‘merry’ ways, drilling to soak up as much market share as they can.

Drilling and fracking will of course begin to pick up as prices approach $40, but concerns about a new ‘Black-gold rush’ are over-wrought. The capacity to put hundreds of rigs back to work simply no longer exists.

In this article we will take a look at the fundamentals of providing services related to fracking, and why capacity has been permanently withdrawn from the market… CLICK for complete article