Barclays has shifted its view of the U.S. energy services industry to Positive, pointing to a nascent upstream spending cycle it expects to be driven by structural changes in global oil markets. The bank now foresees upstream spending expanding 9-10% in 2027 and delivering at least double-digit growth in 2028, versus its prior assumption of a modest 3-5% increase.
Analysts at Barclays described the outlook as the "best setup for services in 20 years," a phrase that captures the firm's belief that an unusually tight global supply backdrop has removed the previous oversupply and established structurally higher oil prices. In reaction to that view, Barclays upgraded a slate of energy services names that it sees as leveraged to rising activity levels and improving pricing conditions.
Firm-level upgrades and rationale
Halliburton Company (HAL) was moved to Overweight. Barclays highlighted Halliburton's leverage to short-cycle North American land activity, a dynamic the bank views as especially valuable if onshore activity ramps. Management commentary from CEO Jeff Miller pointing to accelerating frac attrition, horsepower exports to Saudi Arabia, the UAE and Argentina, and pricing that "appears to have bottomed" supports Barclays' more constructive posture through the second half of 2026. The firm also noted Halliburton's 20% stake in VoltaGrid and its joint distributed power partnership as additional upside optionality. Separately, Halliburton reported first-quarter 2026 results that beat expectations, and RBC Capital subsequently raised its price target. The company also disclosed an agreement to provide integrated consulting and logistical services for Greenland Energy's 2026 drilling campaign.
Patterson-UTI Energy Inc (PTEN) received an Overweight rating as the lone remaining North American pure-play in the coverage set. Barclays pointed to a rising active rig count in the second quarter - currently at 88 rigs and projected to exit the quarter at 94, implying roughly 4-7 rigs being reactivated. The bank expects more than 25 rigs to be added to the U.S. onshore rig count by year-end from the current 530, positioning Patterson-UTI to be a primary beneficiary of that expansion. Patterson-UTI's first-quarter 2026 results topped both earnings and revenue forecasts, and Stifel raised its price target following the report.
Propetro Holding Corp (PUMP) was upgraded to Overweight on signs of recovery in the Permian completions market. Barclays expects the environment to support at least 12 active frac crews and higher pricing later this year. The firm highlighted Propetro's ProPWR business, which recently entered a strategic framework agreement to acquire at least 1.5GW of power generation assets with an option to expand to 2.1GW total; management expects 2.6GW delivered by year-end 2031.
Nabors Industries Ltd (NBR) was raised to Equal Weight as positive trends emerged in both its U.S. and international drilling businesses. Nabors projects its active U.S. rig count to exit the second quarter at 69 rigs versus 65 in the first quarter. In Saudi Arabia, the company operates 53 rigs under the SANAD joint venture with "minimal disruption" and newbuild deployments remain on schedule. Nabors reported first-quarter 2026 earnings that surpassed analyst expectations for both earnings per share and revenue.
Barclays also adjusted its stance on offshore drillers, upgrading Transocean (RIG), Noble Corporation (NE) and Seadrill (SDRL) to Overweight. The bank cited a tightening in the deepwater rig market, noting that 72 rig years of deepwater fixtures year-to-date have already exceeded the total recorded for all of last year. In response to the market tightness, Barclays raised its normalized deepwater dayrate assumption to $500,000 per day by year-end 2028, up from a prior mark of $460,000 per day by year-end 2027. Among the trio, Noble Corporation and Seadrill each reported first-quarter results that beat analyst estimates, while Transocean posted a revenue beat but missed on earnings per share for the quarter.
Implications for industry participants
Barclays' updated forecast and company-level upgrades paint a picture of rising demand for services across both onshore completions and deepwater drilling. Firms with exposure to short-cycle land activity and completion services stand to benefit if rig counts and frac crew utilization expand as predicted. Offshore drillers may experience improved pricing power if the current pace of deepwater fixtures persists, supporting higher dayrates over time.
Company reporting highlights cited by Barclays and market participants
- Halliburton: Q1 2026 results beat expectations; RBC Capital raised its price target; agreement announced to provide consulting and logistical services for Greenland Energy's 2026 drilling campaign.
- Patterson-UTI: Q1 2026 earnings and revenue beat forecasts; Stifel raised its price target; active rigs trending higher in Q2 (88, expected to exit at 94).
- Propetro: Strategic framework agreement in ProPWR to purchase power generation assets with a pathway to 2.6GW by year-end 2031.
- Nabors: Q1 2026 earnings and revenue above expectations; U.S. rig count expected to rise to 69 by the end of Q2; 53 rigs operating in Saudi Arabia under SANAD joint venture with minimal disruption.
- Offshore drillers: 72 rig years of deepwater fixtures year-to-date; Barclays lifts normalized dayrate assumption to $500,000 per day by end-2028.
Market context and bank expectations
Barclays' outlook relies on the removal of global oversupply and a structurally higher oil price environment. The bank's upgraded spending forecasts for 2027 and 2028 are the key driver behind the positive stance for services. That view underpins its decision to move multiple service and drilling names to more favorable ratings, with a particular emphasis on companies that are levered to short-cycle onshore activity or that operate in the tightening deepwater segment.