U.S. oil rebound threatens prices
Schlumberger’s revenue jumps, but uncertainty is persisting
Texas oil fields are booming again and proving even more profitable than anticipated for energy services companies.
But the U.S. oil production rebound — which many analysts worry has come too fast, too soon — threatens to keep crude prices mired in a state of middling purgatory, the chief executive of the world’s largest energy services company said Friday.
Schlumberger, which operates out of Houston, reported Friday that its onshore North American revenues jumped 42 percent from the first quarter of the year with every product line proving profitable, said Paal Kibsgaard, the company’s CEO. Schlumberger’s biggest boost came from a 68 percent jump in U.S. revenues from hydraulic fracturing as the industry heats back up.
Still, U.S. oil producers “have spooked the oil market investors into believing the fast barrels from U.S. land will flood the market and leave inventory levels elevated for the foreseeable future,” Kibsgaard said, adding that there’s “more uncertainty around the shape and timing of the global industry recovery.”
Concerns about increasing U.S. shale production has weighed on the market in recent months, holding down prices despite efforts by OPEC and its partners to cut their production by 1.8 million barrels a day through next year. Kibsgaard told analysts that he expects continued growth in the U.S. market in 2018, but maybe at a slower pace than this year’s rebound.
Jim Wicklund, an analyst at Credit Suisse in Dallas, said investors pushing producers to increase output for short-term gains could undercut the longterm prospects for a price