Bluefield analyzes impact of low oil prices on water service companies
Oil prices, close to US$40 per barrel as of 10 August 2016, continue to undermine any momentum gained in recent months. After hitting $50 per barrel on 7 June 2016–the first time since July 2015– oil prices have since dipped again to further delay a market rebound for water service providers.
The shrinking pool of active energy players places added pressure on water service companies seeking new opportunities. Since the start of 2015, 90 energy companies have filed for bankruptcy protection, including 48 during the first eight months of 2016. Any significant takeoff for an increase in water treatment still hinges on the industry’s approximate breakeven target of US$60/bbl.
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Bluefield Takeaways
- Volatility market conditions signal further delays
- Pioneer focuses on longer-term growth, water risks
- Federal and regional regulations continue to evolve
