As the earnings season for Big Oil has kicked off, we thought it is instructive to discuss the connection between the Frac Spread Count (commonly called the FSC) and oil prices in the wider context of investment outlook of various international companies.
The relationship between oil prices and the Frac Spread Count (FSC) has long been a closely watched indicator of industry activity, but recent trends suggest a fundamental shift in how the two interact. Historically, the FSC followed oil prices with a slight lag, responding to capital inflows and drilling activity. However, the past five years have seen other variables being included in the analysis, with structural changes in the industry altering the way operators respond to price fluctuations.
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