The week’s Monday Macro View focused on the latest EIA data that claims that the base decline rate of horizontal wells keeps steepening, forcing operators to drill more just to hold production steady. To investigate this further, we used Primary Vision’s Frac Spread Count (FSC) data, that showed a different rhythm beneath the surface. The national FSC averaged 173-175 spreads in October and early November. That stability suggests the completions segment remains active even as rig counts drift lower. The Frac Job Count (FJC) also stayed elevated. Together, these indicators imply that service intensity is holding firm.The implication is that the system’s balance depends less on price and more on operational throughput. Forecasts from the EFRACS platform show the national FSC averaging around 170 through next year. Digital fleets are recording increased pumping hours and horsepower, with certain companies reporting maintenance cost savings of more than 30 percent from their digiPrime units. Efficiency gains are helping offset the rising cost of decline replacement, keeping service utilization steady even as producers grow more selective.
The Market Sentiment Tracker analyzed the latest data coming out of U.S., China and Eurozone. The ISM services index climbed to 52.4, while “prices paid” jumped to 70. Energy costs were a key driver. Refinery utilization slipped again, and gasoline inventories dropped by nearly five million barrels. Real rates remain high, and corporate margins are tightening. That mix keeps growth steady. Europe, meanwhile, continues to stagnate. Industrial output improved marginally, but construction collapsed, and consumer confidence remains weak. In China, new loan issuance fell to just 465 billion yuan in October, far below expectations, signaling that private credit appetite has evaporated. Exports and imports both declined, confirming that domestic and external demand remain soft.
Our Key Takeaways focus on company reports this week. Liberty Energy continues to stress on digital optimization and distributed power solutions. Liberty’s strategy this quarter shows a company leaning into its scale and integrated model rather than chasing volume. Management emphasized that current activity levels are below what’s needed to sustain U.S. oil production, suggesting a tighter capacity setup in 2026. STEP entered a transition phase after ARC Financial’s takeover proposal, but operations remain steady. Frac demand held up in Q4, and the company’s coiled tubing business only saw mild pressure from labor disruptions. Debt levels improved, and management emphasized cash flow discipline and a constructive long-term outlook on natural gas activity. Halliburton expects softer North American revenue in Q4 due to seasonality but remains confident in international growth. Nearly half of its active fleets are now ZEUS electric units, underscoring its pivot toward automation and lower-emission technology. Its 20 percent stake in VoltaGrid gives it a foothold in the distributed power space, adding diversification as upstream spending slows. ProFrac is adjusting to lower revenues but expects margins to recover as older equipment retires and utilization improves. Across these updates, the message is consistent: capital discipline is firm, technology adoption is expanding, and efficiency gains are offsetting volume pressure.
The next phase of this market will likely be defined less by shale’s internal rhythm and more by the external balance of supply, cost, and capital. OPEC’s projection of a mild surplus into 2026, the EIA’s view of U.S. production staying near record highs, and the gradual shift of global investment toward offshore all point to a world where growth is harder to monetize. The opportunity now lies in endurance in using technology, balance sheet strength, and capital discipline to stay profitable in a market that rewards efficiency over expansion. The companies that adapt early to this slower, more globally contested cycle will shape the next leg of the industry, not through scale, but through staying power.