This week’s Monday Macro View further cemented the strength that the U.S. shale industry has shown even as oil prices continue to fall. FSC increased by four units while FJC also moved higher. It is notable that FSC is only down by 42 from the same week last year, while the FJC—which reflects actual completions—is slightly above last year’s level. Activity at these levels indicates that operators are not simply sustaining capacity but are improving completion efficiency and equipment utilization in a softer price environment. Additional supply trends reinforce this picture: the Gulf of Mexico is entering a multi-year growth phase linked to new deepwater projects, while Alaska is set for its strongest output gains in decades as Nuna and Pikka ramp. International markets continue to add supply as well, with Iran exporting between 1.5 and 1.7 million barrels per day and Russian flows moving through an increasingly constrained but functional tanker network.
This week we also have a special feature: the latest installment of our break-even price series. The second part shows that large U.S. operators continue to benefit from low lifting costs, roughly $11–12 per barrel for the most efficient producers, while half-cycle and full-cycle breakevens vary widely across the sector. Integrated and large-cap independents such as XOM, CVX, COP, and EOG maintain total cost stacks near $25–30 per BOE, supporting strong operating margins at current price levels. Smaller and mid-cap firms face tighter economics, with higher DD&A, financing costs, and periodic impairments pushing reported earnings below what per-barrel margins imply. The dispersion highlights an industry where scale, access to low-cost capital, and diversified revenue streams remain key determinants of resilience. The findings suggest that while most operators remain profitable at today’s prices, the cushion is uneven, and the capacity to navigate a weaker market varies meaningfully across the peer group.
This week’s Market Sentiment Tracker examines the growing gap between U.S. output growth and the deceleration in hiring. Payroll gains have slowed sharply, at times turning negative, even as GDP growth remains supported by investment in technology and information-processing equipment. Firms appear to be meeting demand through productivity improvements rather than labor expansion, a pattern consistent with elevated uncertainty around policy, trade, and financing conditions. These shifts have reduced job openings without triggering significant layoffs, creating a labor market defined by stagnation rather than stress.
The company-level takeaways this week reinforce these themes. NOV highlights the fading advantage of North American shale as Tier 1 inventory declines and costs rise, while international and offshore markets gain traction. Its expectations of a recovery beginning in late 2026 align with the broader view that offshore and LNG-linked investment is becoming a more durable growth driver. Baker Hughes similarly emphasizes long-term strength in LNG, gas infrastructure, and international activity, though near-term oilfield margins remain under pressure. Both companies point to technology investment and international diversification as essential responses to a shifting cost and supply landscape.
Looking ahead, several themes will shape how these trends progress into early 2026. If you want to understand these factors - whether you are an operator preparing next year’s budget or an analyst assessing the direction of U.S. shale - I recommend attending our upcoming third-party session with Bloomberg.
This session will offer a structured walkthrough of the indicators we have monitored throughout the year, highlighting the operational signals, market behavior, and capital trends that are shaping activity across the sector. You will hear how these datapoints fit together and what they imply for planning, investment decisions, and expectations for 2026.
2025 into 2026: A Sleeping Giant
Live Webinar — December 10
10AM EST / 9AM CDT / 4PM CET
Link for registration: http://www.primaryvision.co/third-party-opinion/