(Reuters) – Demand for U.S. fracking services will not return to pre-pandemic levels until 2025, consultancy Rystad Energy said on Tuesday in an online presentation.
A recovery in demand for hydraulic fracturing services will be “slow and painful,” Thomas Jacob, vice president of Shale Research said. Between 250 and 300 fracking fleets will be enough to meet demand, down from a peak of over 400 fleets in 2018, even if U.S. oil prices recover to above $60 a barrel, he said.
U.S. oil and gas activity collapsed in March as COVID-19-related lockdowns and a brief price war crushed oil prices. Although some fracking activity has resumed, oil prices were trading under $40 a barrel on Tuesday, below breakeven levels for drilling new wells for many companies.
Jacob warned that oversupply in the U.S. fracking market would stretch into 2021 and said more consolidation was needed to help balance the industry, despite a significant amount of equipment being scrapped.
This month, fracking firm Liberty Oilfield Services LBRT.N bought oilfield services provider Schlumberger’s SLB.N U.S. pressure pumping unit in exchange for a 37% stake in the company.
“We need more deals like that to come through,” said Jacob.