I don't know whether the sector will get hit but in this weak/sideways market, anything can happen.
I believe that the Fed will, as usual, overshoot the rates and toss us into a recession by the end of the year. Between the Fed, the energy tax and declining home equity, I doubt the US consumer will do anything more than tread water this year.
We can also look for a continuing decline in durable goods (with aircraft being the exception)but and increase in productivity-related goods and services. I believe that that this, along with continued strength in the energy products sector, should keep oil services moving forward.
Yesterday the 2yr rate was above the 30yr rate. The Fed is populated by governors who got their jobs by being inflation hawks - to the complete blindness of other factors. The consumer is not driving inflation in the US - natural resource inflation has been the key driver based on global demand (not US demand). We have become a Wal-Mart society, with consumers putting constant downward pressure on prices.
Translation - there is zero demand-based inflation in the US and we'll probably see inflation for 2006 drop down into the 1.5% range. This supports a Fed Funds rate of about 3.5% - not the 4.5% we have and whatever it is by the time these numbskulls get done driving the US economy into the dirt.
This being said, energy will be dominant until countries like the US and China get off of the oil standard. In the meantime, enjoy the ride in energy services.