Are oil-services companies doomed?

IN 2020, as demand for crude went up in smoke amid covid-19 lockdowns, so did energy firms’ budgets. That left oilmen with less money to spend on assessing reservoirs, drilling new wells and maintaining existing ones, which they typically outsource to specialist oil-services firms. Between January and June the number of active rigs worldwide fell by half, to just over 1,000. On January 19th Jeff Miller, boss of Halliburton, a service-industry giant, called last year “the worst in our history”. His firms’ revenues fell by 36%, to $14.4bn, leading to an operating loss of $2.4bn.Still, Mr Miller insisted, the future looks brighter. He predicted “a multi-year upcycle” beginning in 2022. On January 22nd Olivier Le Peuch, chief executive of Schlumberger, a big rival, echoed this sentiment, declaring “a new growth cycle”. A day earlier executives at Baker Hughes, the third big provider, sounded a similarly chirpy note. Is this optimism misplaced?