Courtesy of halliburton.com

Halliburton Co., promising to be disciplined in adding more fracking gear to the oilfields, says U.S. explorers are "tapping the brakes" on drilling as the price of oil struggles to breach $50 a barrel.

The comments come days after Baker Hughes data found that explorers reduced the number of U.S. rigs for the second time in four weeks. The decline and the statements by Halliburton, the world’s biggest provider of fracking services, could bolster confidence that spending by the shale industry may be slowing as efforts by OPEC and its allies to raise oil prices have faltered.

In November, the Organization of Petroleum Exporting Countries and allies agreed to cut output, immediately boosting crude prices after the worst market rout in a generation. Since then, the U.S. shale industry has seen a growth spurt that’s kept stockpiles topped off and prices static. Now, signs are emerging that the U.S. industry may be eyeing its own slowdown.

"Today, rig count growth is showing signs of plateauing and customers are tapping the brakes," Halliburton  Executive Chairman Dave Lesar said on a call. "This demonstrates that individual companies are making rational decisions in the best interest of their shareholders.

The comments came after Halliburton reported that it swung to a profit in the second quarter as revenue rose 29 percent from a year earlier to $4.96 billion. That’s more than $1 billion higher than the company reported a year earlier. The comment by Lesar surprised analysts on the call, said J. David Anderson at Barclays Capital Inc.

"Optically it’s bad for service companies," Anderson, who rates the shares the equivalent of a buy and owns none, said in a phone interview. But it’s also a positive for the oil market as a whole, he added.

Halliburton’s shares fell as much as 5.3 percent to $42.02. They traded at $42.13 as of 3:37 p.m. in New York, headed for the biggest drop since August 2015. West Texas Intermediate, the U.S. benchmark crude, rose 1.3 percent to settle at $46.34 Monday on the New York Mercantile Exchange.

"This tapping of the breaks is happening all over North America," Lesar said. "I can tell you the market will respond, it will rebalance and these companies will stay alive, survive and thrive."

Halliburton swung to a profit of $28 million, or 3 cents a share, from a loss of $3.2 billion, or $3.73, a year earlier, the Houston-based company said Monday in a statement. The quarter’s results show Halliburton’s strength in North America and suggest its reach is expanding globally, according to Lesar.

"We outperformed our major peer in every geo-market, demonstrating that we continue to grow our global market share,” he said in the statement.

Source: bloomberg.com