Fracking crew shortage may push oil’s biggest bubble to 2018

Shale explorers pushing to expand oil production are struggling to find enough fracking crews after thousands of workers were dismissed during the crude rout.

As Bloomberg reports, independent U.S. drillers underspent their first-quarter budgets by as much as $2.5 billion collectively, largely because they couldn’t find enough fracking crews to handle all the planned work—that’s according to Infill Thinking LLC, a research and consulting firm focused on oilfield services and exploration.

If the scarcity holds, output increases planned for this summer may get pushed into 2018, creating an unanticipated production bulge with “scary” implications for oil prices, says Joseph Triepke, Infill’s founder.

In some cases, active crews are walking away from jobs they signed up for months ago—and paying early-termination penalties—to take higher-paying assignments with other explorers. Workers earn anywhere from $29,000 to $72,000 a year before overtime, depending on the company and the region.

The tight fracking market “means U.S. oil production growth this year will be back-half weighted, and we may not understand the full extent of U.S. production growth until early 2018,” says Triepke, who previously was an analyst at Citadel LLC’s Surveyor Capital unit. “This point is particularly scary if you are rooting for higher oil prices.”

Bloomberg has the full story.

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