U.S. oil service companies face hard quarter despite high crude oil prices

HOUSTON (AP) – even as crude oil prices hover close to four-year highs, US oilfield service companies results of the third quarter by that in the coming days a wobbly Recreation as to reflect their customers make drilling constraints and pressures, keep spending.

file photo: a drilling crew member throws drill pipe on the drilling rig floor on an oil rig in the Permian Basin in the vicinity of wink, Texas United States 22 August 2018. REUTERS/Nick Oxford/file photo

oil producers hold way finishing new wells and cost pressures from tight labor markets and US tariffs on imported steel services companies drive costs higher.

in the meantime, slate manufacturer including Devon Energy Corp (DVN. N) and OASIS Petroleum Inc (OAS. N) which traditionally by service companies are treated more work.

the West Texas drills, which drove the shale revolution overwhelmed the infrastructure of the region with oil production costs, depressing regional oil prices and slowing the pace of output growth.

“the risk for a number of (oil field service provider) down,” said Brad Handler, a Jefferies stock analyst in New York, the oilfield service sector follows.

file photo: a drilling crew used a mechanical rough leg machine thread drill pipe together on an oil rig in the Permian Basin in the vicinity of wink, Texas United States 22 August 2018. REUTERS/Nick Oxford/file photo

Wallstreet is trimming profit forecasts for oil field leader Schlumberger NV (SLB. N) and Halliburton co. (HAL. N), and for pressure pumper Keane Group Inc (FRAC. N) and provider US silica sand Holdings Inc (SLCA. N). Schlumberger launches third quarter reporting by the sector on Friday.

the cuts come despite third quarter oil prices CLc1, more than 40 percent over the previous year.

Schlumberger is expected to report a profit of 47 cents per share, from 39 cents per share, in the same quarter a year ago, according to Refinitiv I/B/E/S. Halliburton per share profit will be expected to be 49 cents, compared with 42 cents a year ago.

(for a graph of the oilfield service stocks compared with the U.S. crude oil benchmark, click here: tmsnrt.rs/2PAkhe3)

weaknesses at the completion of the fountain is concern worrying, because such services on the day still waiting for offshore companies Drilling have exercised to bring.

completed a fountain of fracking and it connect piping provides about 60 percent of onshore well spending. Keep with producers from completions, to new pipelines to next year start there is less demand for services.

“the market for Frac spread is very soft, still below what we started in the year 2018,” Bill Thomas, Chief Executive of EOG resources Inc. (EOG. N), told investors at a Conference in New York last month.

the number of active hydraulic fracturing spreads or fleets in the Permian, the largest oil field in the United States operates 172 of 192 earlier in this year dropped, and such fleets in the United States dropped to 460 from a high of 480, according to Provider primary vision.

“lower utilization and completion of higher efficiency creates more room in the system with pressure pumper most at risk in the end of the year,” Barclays said in a note this month.

Unwillingness to increase spending despite higher oil prices is also a tribute

producers. The Barclays analysts estimate that upstream more than 80 per cent of the producer households soon, if third parties be tapped quarter spending was similar in the second quarter.

Bernstein analysts estimate it could expect 15 percent decline in the fracking activity, more but they that the market down early next year.

“is still more declines as we approach winter and roles in the new E & P (exploration and production) budget cycle,” Colin Davies, senior analyst for Bernstein wrote in a note.

message from Liz Hampton; Editing by Marguerita CHOY

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