Peak Shale? Payback Time: Oilfield Services Raise Prices

By Tyler Durden

Authored by Irina Slav via OilPrice.com,

Oilfield service providers are upping their prices, the latest Dallas Fed Energy Survey has found, confirming what producers began to complain about last year when oil prices started recovering.

The survey found the index of input costs for oilfield services jumped from 46.8 from 30.9 this quarter from last. The index for oilfield service prices was also higher in Q1 2018, at 27.9 from 22.6.

Further strengthening the view of an industry in recovery, the survey also found that the index for utilization of oilfield service equipment was higher this quarter, at 40.4. That’s up 11 points from the reading for the last quarter of 2018, the Dallas Fed noted.

Higher oilfield services prices began pressuring producers’ margins soon after the industry officially swung into recovery and growth mode. It was only to be expected because the services sector suffered a harder blow from the oil price collapse, with providers forced to offer huge discounts to drillers in order to stay in business.

Once prices began rising again, producers were eager to start pumping more again and not long after there was a shortage of frack crews and equipment on the horizon. This …read more

Source:: ZeroHedge