Schlumberger, Halliburton post multiyear highs as U.S. crude touches $130/bbl
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Leading oilfield services companies Schlumberger (SLB
+8.1%), Halliburton (HAL
+6.2%) and Baker Hughes (BKR
+4.7%) all closed at multiyear highs Monday, leading the energy sector as WTI crude oil closed at its highest front-month contract finish since September 2008 after setting an overnight high at $130.50/bbl.
Investors are betting that oilfield service providers will benefit from an uptick in U.S. production activity to make up for the potential loss of Russian oil supply, which "exceeds the upside" of potential supply from Iran, SPI Asset Management's Stephen Innes told MarketWatch.
Bank of America says last week's flat performance for Schlumberger shares was overdone, believing the company will be under much less pressure to fully exit Russia than BP, Shell and Exxon, given the "transactional nature" of its Russian business, and Schlumberger would be a "key beneficiary of short-term drilling and completion boost from $100-plus oil, along with higher workover, interventional and other production oriented work."
Also rising to new 52-week highs: RIG
+16.7%, NOV
+15.6%, WHD
+10.2%, HP
+6.5%, PTEN
+6.2%, NBR
+2%.
Smaller energy services stocks also racked up big gains, including ENSV
+85.2%, OIS
+20.9%, CLB
+14.2%, SDPI
+14%, OII
+10.1%, DRQ
+9.3%.
ETFs: XLE, VDE, OIH
Schlumberger, Halliburton and Baker Hughes fell early last week after reports from J.P. Morgan Chase and Citigroup said earnings for the trio likely would be impaired from working in Russia.