The Market Likes the Bull Case for Oil Services
May 15th, 2008 | By Brian Hunt | Category: Oil Investment & Alternative EnergyThe long-term bullish case for oil services is a no-brainer. Here’s why…
When oil sells for $125 a barrel, it creates a two-pronged situation in the oil industry: 1) It encourages producers to turn on the pumps at full blast. This depletes fields faster… 2) It creates unbelievably large cash flows for the “biggies” like Chevron, Gazprom, and ExxonMobil. And they can direct those cash flows toward finding more oil… It adds up to huge demand for pumps, drill steel, offshore platforms, pipelines, and valves.
Those fundamentals sound great… but what is the market saying about it?
The market says, “I like it… Let’s send Tenaris, the world’s top maker of drilling pipe, to a new all-time high. Don’t forget new highs for Flowserve, the big maker of pipe valves, and Gulf Island Fabrication, the rig builder. New highs for everyone who operates land drills as well. And heck, let’s include the infamous Halliburton. After all, it’s a bull market in oil services!”
Source: The Market Likes the Bull Case for Oil Services
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