Monday Macro View: Is U.S. Shale Activity About to Slow Down

There’s been a lot of noise in the oil market lately—prices slipping, spreads tightening, operators adjusting guidance. At a glance, nothing seems to have broken yet. But the surface-level calm in U.S. shale is starting to feel a little misleading. The latest completions data shows activity still holding up. But behind that, spread counts are falling, service firms are rebalancing, and oil prices have quietly reset lower. This week’s numbers highlight a growing disconnect between what’s happening in the field and what’s taking shape in the broader market. The question isn’t whether something has shifted—it’s how long the momentum can last.

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The numbers are drifting apart again—and they’re doing so at a moment when the broader oil market is under real pressure. This week’s Primary Vision data shows a drop of seven frac spreads, bringing the national total down to 186. It also shows a rise in frac jobs, up ten to 217. At first glance, it’s tempting to read this as a routine fluctuation or as another week of operational efficiency. But when you line it up with what’s happening in oil markets and corporate balance sheets, it starts to look like something else entirely.

The International Energy Agency now projects that global oil supply will grow by 1.6 million barrels per day this year—more than double the expected demand growth of just 740,000 bpd. That imbalance is growing more entrenched. While demand held up in Q1, led by India and China, the latest data suggests the second half of the year will be far slower. The IEA now expects demand growth to fall to just 650 kb/d in the coming quarters, with OECD countries already in structural decline. Meanwhile, OPEC+ has moved up its production schedule, effectively advancing output that had been planned for later in 2025. This decision, paired with persistent oversupply from non-OPEC+ countries, sets up a familiar scenario: too much oil, too quickly, into a market that’s losing momentum. Brent futures dropped by $14/bbl in April alone, briefly touching the low $60s before recovering slightly. At the time of writing, they’re still struggling to hold above $66. The market may have moved past its most bearish moment for now, but fundamentals are still slipping—and that’s the backdrop U.S. shale is working against.

The field already seems to be reacting. Independent producers, particularly those without downstream integration or hedge protection, have begun revising capital guidance. Rig count trajectories are already being nudged lower for the back half of the year. But the more revealing signals are coming from the service sector. Halliburton has acknowledged weakening utilization in North America and suggested it may retire or export frac capacity if conditions deteriorate further. Baker Hughes expects a low double-digit cut in upstream spending in the U.S., and it’s repositioning around natural gas, LNG infrastructure, and international projects. TechnipFMC has moved nearly all of its revenue exposure outside of U.S. onshore, with recent iEPCI wins in Brazil and Norway leading its Q1 inbound orders. Collectively, these moves point to a realignment underway—one driven not by crisis, but by strategic recognition that the U.S. onshore may not deliver the returns it did in 2022 or 2023.

Still, completions activity is holding up, and frac jobs are even climbing. That divergence—the rising FJC against a falling FSC—isn’t random. Operators may be trying to front-load completions while their service contracts are still intact and while oil prices still support marginal returns. Some may be finishing drilled-but-uncompleted wells (DUCs) before budget tightening kicks in. It’s less about optimism and more about positioning—get the barrels online now, before Q3 price decks force harder conversations.

This kind of compression happens late in cycles. You get more jobs done with fewer spreads—not because the system is evolving, but because crews are being stretched, downtime is being cut, and operators are asking for more output per deployed asset. On the surface, activity looks healthy. But it doesn’t take much—a price dip, a refinancing event, or another round of cost inflation—for that surface to break.

The big issue now is timing. Oil prices have stabilized somewhat, but they’re still weak relative to where capital budgets were set just a few months ago. Refining margins are holding up, and inventories aren’t yet at crisis levels , but the direction is clear. Supply is outpacing demand. OECD stocks remain well below five-year averages, but crude held on water and in non-OECD countries is rising. If emerging market demand doesn’t re-accelerate in Q3—and if OPEC+ continues to push supply higher—price support may not last.

Looking ahead, the direction of the Frac Spread Count looks downward - at least over the next three months. However, we are not expecting a collapse rather a steady erosion of available crews. With the current count at 186, and oil prices hovering in the mid-$60s, we estimate the FSC could decline by roughly 0.6 to 1 spread per week through the rest of the summer. That implies a total drop of 7 to 12 spreads by August, bringing the national count into a range of approximately 174 to 179. Demand from Summer Driving Season and the potential delay in a U.S. - Iran deal might provide further support. However, without a decisive rebound in prices or an unexpected tightening of supply, there’s little incentive for operators or service providers to expand capacity. Instead, we’re likely to see the current job volume held as long as budgets allow—before spreads start coming offline in response to capital discipline and margin compression.

In the short term, job counts remain strong. But if pricing pressure continues and operational intensity outpaces actual crew availability, the next signal to watch will be cycle time and job duration. When those metrics start to stretch out—or when FJC stops rising—you’ll know the field has finally slowed down. For now, it’s still moving. But the cracks are widening.

I highly recommend to read the latest KEY TAKEAWAYs by our analyst Avik Chowdhury to get a deeper understanding of the oil field industry and its future direction.