Play the 10-Month High Crude Price With These 3 Oilfield Stocks
Energy stocks are again on the radar of most investors, with oil prices crossing the $90-per-barrel mark for the first time since November. Crude prices are soaring, which calls for investment in oilfield service companies. Three such companies that are well poised to gain are Core Laboratories Inc. CLB, Solaris Oilfield Infrastructure, Inc. SOI and Helix Energy Solutions Group, Inc. HLX.
Oil Price at 10-Month High Mark
The price of West Texas Intermediate crude is trading at a bullish territory, marking an extremely healthy oil pricing scenario. The outperformance stems from the possibility of tighter crude supplies, which outweighs worries over fuel demand.
The International Energy Agency said that the extension of production cut by Saudi Arabia and Russia through the end of this year will lead to a supply deficit through the December quarter. This is primarily aiding the crude rally, though the economic recovery of China – the world's second-largest crude consumer – has remained choppy.
The favorable crude price is making the exploration and production business extremely profitable. Higher upstream activities will increase demand for oilfield services since oilfield service players will guide explorers and producers in efficiently setting up oil and gas wells.
3 Stocks to Buy
Employing our proprietary Stock Screener, we have zeroed in on three stocks belonging to the oilfield service space that are well poised to gain. One of the stocks carries a Zacks Rank #2 (Buy), while the other two sport a Zacks Rank #1 (Strong Buy).
Being a well-known provider of patented reservoir description and production enhancement services, Core Laboratories is well-positioned to grow, thanks to improving demand for reservoir description services. Core Lab, carrying a Zacks Rank of 2, is also focused on reducing its debt load.
More patented equipment and systems of Solaris Oilfield Infrastructure will likely be deployed to the prolific oil and gas basins in the United States. This is because favorable commodity prices will likely improve upstream activities, increasing demand for those equipment and systems. Currently, Solaris sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Amid favorable crude prices, activities across the world in the oil and gas market are likely to continue increasing. This, in turn, can raise demand for offshore energy services. Being a leading international offshore energy services company, Zacks #1 Ranked Helix Energy Solutions is well poised to gain.
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Core Laboratories Inc. (CLB) : Free Stock Analysis Report
Helix Energy Solutions Group, Inc. (HLX) : Free Stock Analysis Report
Solaris Oilfield Infrastructure, Inc. (SOI) : Free Stock Analysis Report
