Higher commodity prices invariably spur producers to increase spending on new projects and to up their output. That frequently leads to the oversupply of the commodity and, eventually, lower prices. The energy industry is no exception. Between 2002 and mid-2014, when oil prices were high, producers accelerated exploration and output. The active oil rig count in the U.S. and Canada is a good indicator of drilling activity,. It increased from 158 in early 2002 to a peak of 1,840 by October 2014 (see graph below). This was also a period when oil producers—and the companies that supply them with products and services—performed very well. Predictably, when oil prices went into a prolonged decline in late 2014, the fortunes of producers and service providers also fell. That led to dramatic cost cutting. Oil producers, who were struggling with overcapacity and lower prices, squeezed their suppliers for lower rates on drilling rigs, well completions, fracking sand and well-to-pipeline connecting services. Since early 2016, oil prices…