U.S. Energy Corp. minister's former employer Liberty Energy (LBRT.US) stock price plummets 40%, is U.S. oil production sounding the alarm?

Despite U.S. Energy Corp. Department Head Chris Wright's statement that President Trump is giving the green light to increase U.S. oil production, signals from Liberty Energy, a fracking services company where he used to work, are showing red lights. Poor Performance of U.S. Oil and Gas Service Companies Precedes Decline in Oil Production? Before serving as the Energy Department head, Wright was the CEO of Liberty Energy, a fracking service company focused on providing hydraulic fracturing services and support services to exploration and production companies in North America. The company's stock price has plummeted by 43% this year, making it one of the worst-performing stocks among U.S. Energy Corp. stocks. The sharp drop in Liberty Energy's stock price is a warning sign: despite Trump's promises to achieve American "energy dominance," the situation of the U.S. shale oil industry is not optimistic. The performance of oil and gas service companies is usually a leading indicator of industry performance, as they are at the forefront of drilling and fracking new wells. Following concerns about demand due to the trade war and OPEC+ exceeding production expectations, investors expect that U.S. shale oil producers will avoid further increasing oil production in an already oversupplied market. The revenue of oil and gas service companies largely depends on the spending of shale oil producers on drilling and fracking new wells, making them particularly vulnerable to industry downturns. In contrast, shale oil producers can continue to generate revenue from existing wells and can choose to hedge against falling oil prices and renegotiate low-cost drilling contracts. So far, oil and gas service companies have been hit hard by concerns about oversupply in the oil market. An index tracking U.S. oil and gas service companies has fallen by 28% this year, while an index tracking U.S. oil and natural gas producers has fallen by 7%. The poor performance of oil and gas service companies suggests that U.S. oil production may stagnate this year or even experience its first decline since the pandemic began. Dan Pickering, Chief Investment Officer at Pickering Energy Partners, a financial services company focused on the energy industry, said: "This is destined to be a painful process. We've heard some whispers about what's coming next, that drilling activity will slow down and fracking crews will be disbanded." Liberty Energy will report earnings after the U.S. stock market closes on Wednesday, kicking off the earnings season for oil and gas service companies. Larger competitors like Halliburton, Baker Hughes, and Schlumberger will report earnings next week.In the industry where money and voting overwhelmingly support Trump's presidential campaign, concerns about demand are increasing. Roe Patterson said, "I hope the government can be more consistent in its statements on oil-related issues and provide some support for prices." "Frankly, a lot of the things they're saying now don't make sense.""Bonjour, comment a va?" "Hello, how are you?"