U.S. oil majors are set to release their financial results in the coming week. Therefore, it is important to learn the impact of earnings on the future oil production that we track via Frac Spread Count. For this purpose, we will trace the history of FSC and how it complements other indicators presenting the reader with a clear snapshot of the future. This week’s newsletter focus on the trajectory of U.S. oil supply and global economy.

1. MMV: What is the relationship between FSC and U.S. oil production? – PREMIUM

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. Read the full article for learn more.

2. MST: Trade War Looms Large – PREMIUM

Five consecutive rate cuts have lowered the deposit rate to 2.75% in Europe, a move that is expected to stimulate borrowing, consumption, and investment. In China, Headline inflation has risen to 2.5% in January, driven by surging energy prices, and remains above the target of 2%, creating concerns about persistent inflationary pressures. In the U.S., bearish factors stem primarily from trade and manufacturing challenges. President Trump’s imposition of tariffs—25% on imports from Canada and Mexico and 10% on imports from China—has contributed to external economic pressure. Read our weekly Market Sentiment Tracker for more detailed updates on global economy.

3. PRIMARY VISION INSIGHTS – ENTERPRISE

The crude markets cooled off a bit after a strong spike above $80 Brent, but as we highlighted in our previous write up- we expected the price to fall back in the $73-$78 range. We still believe that $75 will be the longer running average throughout Q1’25. Heading into 2025, Mark Rossano, our senior analyst, expect to see a bit more weakness on the demand side, which has played out so far. Read this mandatory essay on the state of global oil markets and the wider macro-economic situation in key economic regions.

4. NOV: Q4 TAKE THREE – PREMIUM

In FY2025, the company’s management expects to face challenges from a “flat-to-lower” global industry activity and geopolitical uncertainty. Positives will stem from the growing backlog of higher-margin offshore production-related capital equipment and the adoption of new technology. Read Avik Chowdhury’s brilliant research on various OFS companies and rwhat have they planned for future.

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