In this week’s Monday Macro View, we start with a brief but necessary clarification of what last week’s activity data actually tells us. The Frac Spread Count fell by six and the Frac Job Count slipped as well, while rigs declined by ten, amounting to a 2–3% adjustment that fits squarely within the range typically seen around Thanksgiving. The comparison with 2024, when spreads fell by roughly 3% during the same week before recovering almost fully, reinforces the interpretation that these shifts are operational rather than directional. Permian activity remains stable which supports the view that the core of U.S. shale is unchanged heading into December. The broader oil context is also being shaped by how markets interpret ongoing geopolitical negotiations. The current phase of Russia–Ukraine diplomacy has narrowed the distribution of outcomes, and price action over the past month shows a market that is no longer trading worst-case scenarios.
The Market Sentiment Tracker shifts the lens toward 2026 demand fundamentals, where sectoral divergences now matter more than headline growth. Petrochemicals continue to anchor the modest upside, supported by new capacity in China, the U.S., and the Middle East. Aviation fuel remains a net contributor as global passenger demand expands further, with 2025 RPKs tracking above pre-pandemic seasonal patterns. Diesel remains the drag, reflecting persistent weakness in manufacturing and freight and a growing substitution effect from LNG trucking. Road fuels face structural pressure from EVs, and China’s flattening gasoline consumption in 2025 marks an early signpost for the next leg of transport demand. Collectively, these signals point to a 2026 demand increase around 650 kb/d—steady enough to avoid contraction but overshadowed by an expected 2.5 mb/d supply build.
This week we also wrote a special article, In Depth, that investigates how shale plan to increase efficiency. Operators are leaning on incremental gains, lighter proppants, more sophisticated surfactants, selective gas-injection cycles, and early-stage chemical and nanoparticle approaches, that together improve recovery rates in tight formations. These changes do not alter the core physics of shale, but they do shift the cost curve and extend the productive life of existing assets. As more operators apply these techniques in 2026, the sector could sustain output at lower rig counts, making U.S. supply more resilient to price soft patches.
Key takeaways from Nabors highlight how a major drilling contractor interprets this environment. The company expects U.S. activity to remain soft near term but firm by late 2026, with gas-linked exposure and Middle East projects offsetting domestic variability. SANAD continues to expand, a potential reinstatement of Saudi rigs is back on the table, and integration of Parker assets is enhancing cash flow through 2026. The Quail Tools sale lowered leverage and sharpened the balance sheet, positioning the company for a more disciplined capital framework as global rig demand gradually normalizes.
Looking ahead into early 2026, the convergence of modest demand growth, accelerating efficiency in shale, and steady international drilling suggests a market that may become more supply-heavy unless policy or geopolitics change the trajectory.
IMPORTANT NOTE: This is another reminder to register for the upcoming Third Party Opinion Webinar that Primary Vision is hosting along with Bloomberg. Anyone who wants to understand the actual future direction of U.S. shale industry and oil production, this is a must attend for them!
The Fruition of Optimization
Live Webinar — December 10
10AM EST / 9AM CDT / 4PM CET
Link for registration: http://www.primaryvision.co/third-party-opinion/