Oil-services shares gain with stronger oil prices
Updated: Tue, Nov 20 12:50 PM EST
NEW YORK (Reuters) - Shares of oil-services companies moved up on Tuesday on speculation that an agreement among OPEC and non-OPEC oil producers to cut output was imminent. The speculation also bolstered sagging oil prices.
The Philadelphia Oil Service Index, which fell 13.8 percent last week, was up 3.8 percent, and the Standard and Poor's Oil Drilling Index was ahead 4.28 percent.
Major integrated drillers Schlumberger Ltd., Halliburton Co. and Baker Hughes Inc. were among the strongest gainers, while offshore drillers like Rowan Cos. Inc. and Transocean Sedco Forex also showed good gains.
On the New York Stock Exchange, shares of Schlumberger gained 6.8 percent, or $3.05, to $47.98, while Halliburton shares were up 5.7 percent, or $1.15, to $21.50.
Baker Hughes gained 6.3 percent, or $1.94, to $32.94, while Rowan was up 6.9 percent, or $1.06, to 16.44. Transocean rose 6.2 percent, or $1.68, to $28.99.
Shares of Precision Drilling, Canada's largest oil service company, rose 4.3 percent, or C$1.40, to C$34.07 in Toronto.
Analysts remain cautious on the outlook for U.S. onshore drillers due to weak natural gas prices, but sone predict that companies with a more international scope will take a more long-term view when parceling out dollars for exploration and production spending.
Shares of companies that have big onshore drilling operations, such as Nabors Industries and Parker Drilling, also gained, but not as much as the larger offshore drillers.
Nabors shares were up 4.7 percent, or $1.37, to $30.82, while shares of Parker gained 10 cents, or 3.3 percent, to $3.09.
Members of the Organization of Petroleum Exporting Countries (OPEC) have said they will cut oil output by 1.5 million barrels per day beginning in January, contingent on a commitment from non-OPEC oil producers, including Mexico, Norway, Oman and Russia, to cut their output by 500,000 barrels per day.
Russia, the world's No. 2 oil producer, has not yet committed to making the cuts, but a statement by its deputy prime minister that it was considering the cuts was viewed as positive. Also, Norway's oil minister said Oslo would cut crude output if all OPEC members and non-OPEC oil exporters made cuts.
According to the energy watchdog International Energy Agency, OPEC produced 30.3 million barrels of liquids per day in the third quarter, less than half the daily worldwide output of 77 million barrels. Global demand was put at 75.7 million barrels per day. |
