The steady and substantial climb in oil prices has led to more business for oilfield service providers and higher prices, Reuters has reported, citing data from the industry.
"We are already beginning to see a positive increase in activity and an upturn in service pricing will hopefully be reflected in the coming months," the report quoted Packers Plus Energy Services' chief executive Stuart Wilson as saying.
The revival of the oilfield service industry comes despite continuing financial discipline on the part of exploration and production companies and a slow recovery in U.S. shale oil output than in previous industry cycles.
Hiring in the industry has also ticked up after bottoming out at less than 600,000 at the beginning of this year. Since then, the oilfield services industry has added more than 27,000 jobs, the Reuters report said.
"Operators appear to be a lot more optimistic and considering projects that have lay dormant the previous year," Packers Plus' Wilson told Reuters. "We are seeing more orders being confirmed at pricing levels that are more comparable to pre-pandemic levels."
The oilfield services segment of the energy industry is normally the hardest hit when prices tank as exploration and production companies tighten their purse strings and cut budgets and output. The last crisis was particularly severe for oilfield service providers, as it hit their clients worse than any previous price collapse.
Business will likely continue to improve in the months and possibly years to come: rising oil prices, which hit the highest in three years this month, have already prompted warnings that supply will need to increase to curb the rally.
Reuters' John Kemp earlier this week wrote in his weekly column that a ramp-up in oil production was urgently needed as the global economy-and with it, demand for crude-was recovering faster than previously expected.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More