January Industry Report

STEADY PRODUCTION, TIGHTER MARGINS, AND WHAT IT MEANS FOR TANKS & VESSELS

Pitts

Heading into 2026, the Permian is still the workhorse, but the tone is shifting from “grow at all costs” to “optimize and defend margins.”

Recent EIA outlooks point to rising global inventories and downward pressure on crude prices into 2026, and they’re even forecasting a slight dip in overall U.S. crude production in 2026 after several years of growth, with the Permian remaining the biggest driver of U.S. output.

In the field, activity signals reflect that same discipline: the U.S. rig count is still down year-over-year, even with a small late-December bump.

For the tank and vessel market, that environment usually means less “speculative” spend and more “must-have” infrastructure, especially around produced water handling, emissions compliance, and reliability upgrades.

When operators prioritize efficiency, we tend to see continued demand for production equipment, storage, and processing vessels that reduce downtime, improve measurement/controls, and help capture gas instead of flaring.

And one additional tailwind to watch in Texas: power demand growth from data centers/AI is becoming a real driver of new energy infrastructure conversations, especially natural gas supply and takeaway, creating potential knock-on opportunities for upstream and midstream equipment needs.

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PITTS OILFIELD PRODUCTS & SERVICES

NEWSLETTER

Your Monthly Update on the Oil & Gas Industry

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January Industry Report

As we kick off the new year, the oil and gas industry enters January with steady momentum and a forward-looking outlook. Activity across key basins remains resilient, and demand for reliable infrastructure continues to drive opportunity as operators plan for the year ahead.

In this January State of the Oil and Gas Industry newsletter, we’ll share a brief snapshot of current market conditions, what we’re watching as 2026 unfolds, and what’s ahead for Pitts Oilfield. We’re also proud to highlight a local nonprofit making a meaningful impact in our community, continuing our commitment to giving back as we start the new year.

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2026 Outlook: Steady Volumes, Tighter Prices

Most forecasts heading into 2026 point to a well-supplied oil market that keeps a lid on prices, even if demand keeps inching higher. The EIA’s latest Short-Term Energy Outlook projects U.S. crude production averaging ~13.5 million b/d in 2026, slightly lower than 2025 after several years of growth led largely by the Permian.

At the same time, EIA expects global inventories to keep building through 2026, putting downward pressure on crude. Forecasting Brent near $55/bbl in early 2026 and roughly around that level the rest of the year.

Industry sentiment in Texas also reads “cautious but operating”: the Dallas Fed Energy Survey shows many E&Ps expect 2026 capex to stay close to 2025, while oilfield services respondents lean more toward flat-to-down spending.

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What It Means for Tank & Vessels in West Texas

For tank and vessel manufacturers, a “disciplined” 2026 typically shifts demand from big expansion projects to execution work: facility upgrades, replacements, emissions/compliance projects, produced-water handling, and midstream tie-ins—especially when operators prioritize efficiency and uptime under price pressure.

A softer pricing environment may slow large projects, but it often keeps fabrication shops active with smaller, execution-focused scopes that still demand reliable lead times and consistent quality.

The most effective actions now are practical and focused: staying closely aligned with operators’ and midstream contractors’ 2026 budgets, offer streamlined “fast-turn” standardized builds with clearly defined delivery timelines, and emphasize compliance-ready solutions such as vapor control systems, safety features, and complete project documentation.

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As we begin the new year, January sets the tone for what’s ahead in the oil and gas industry—steady activity, disciplined spending, and a continued focus on reliability and efficiency.

We look forward to sharing more insights, project updates, and community highlights throughout the year, and we thank you for your continued support of Pitts Oilfield Products and Services.

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CONCHO VALLEY REGIONAL FOOD BANK

COMMUNITY SPOTLIGHT

This month, we’re proud to highlight the Concho Valley Regional Food Bank. A vital nonprofit dedicated to feeding individuals and families facing food insecurity throughout our region. As a 501(c)(3) nonprofit serving San Angelo and the surrounding Concho Valley, this organization partners with local pantries, meal sites, schools, and programs to ensure that nutritious food reaches those who need it most. For every dollar donated, the Food Bank can provide multiple meals, making every contribution go a long way toward reducing hunger locally.

The mission of the Concho Valley Regional Food Bank extends beyond simply distributing food. They work with community partners to bring meaningful, people-centered solutions to hunger. Through weekend food programs for children, emergency food distribution, and outreach initiatives, the Food Bank helps families facing tough times put meals on the table and get connected to other supportive resources. Their work is a cornerstone of compassion in our community, ensuring that children, seniors, and neighbors in need don’t go hungry.

Your support can make a meaningful impact in several ways. Financial contributions allow the Food Bank to purchase food in bulk and respond quickly to urgent needs, while food donations help support local distribution efforts. Donating your time is equally valuable. Volunteers assist with sorting and packing food, helping at distribution events, and supporting mobile food drives across the region. You can also organize a food drive with friends, coworkers, or community groups to collect non-perishable items, or help by spreading awareness through social media and word of mouth to connect more neighbors with this vital resource.

By supporting the Concho Valley Regional Food Bank, you’re helping ensure that no one in our community has to wonder where their next meal will come from. It’s a simple but powerful way to give back right here at home.