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Crude Holds Above $94: Are Oilfield Stocks an Attractive Opportunity Now?
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Key Takeaways
Baker Hughes may benefit as elevated oil prices support active drilling and production programs.
Oceaneering may see healthier ROV and offshore services demand as producers commit more capital.
BKR sees improving activity in several regions, while OII reports stronger activity and longer contracts.
Oil prices remain elevated, opening up opportunities for many companies in the space. Several concerns arise, ranging from inflation to broader ripple effects across the economy. However, high commodity prices are prompting investors to allocate money in the oil-energy sector. Let’s delve into the factors that could make oilfield service players attractive to investors.
High Oil Price: Sweet Spot for Oilfield Service Players?
West Texas Intermediate (“WTI”) crude is trading above $94 per barrel. The high prices are being driven by ongoing tensions in the Middle East. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $84.65 per barrel for this year, higher than $65.40 last year. A highly favorable pricing environment for the commodity is likely to continue supporting exploration and production activities.
In this regard, upstream players operating in the Permian, the most prolific basin in the United States, and other promising resources are likely to continue benefiting from the ongoing strength in oil prices. In the outlook, EIA estimated that total crude oil production in the United States would be 13.83 million barrels per day this year, higher than 13.66 million barrels per day last year.
With high prices of the commodity, production will likely increase in U.S. resources and will in turn boost the demand for oilfield services. This is because oilfield service players help explorers and producers to effectively set up oil and gas wells.
BKR & OII: 2 Energy Stocks Worth Betting on Now
Elevated oil prices may encourage producers to keep drilling and production programs active, supporting demand for Baker Hughes’ (BKR - Free Report) oilfield services. Management also sees improving activity across North America, Brazil, Mexico, the Asia-Pacific and parts of Africa. Healthy subsea orders and stronger backlog execution could provide further support, even as overall global upstream spending is expected to ease modestly in 2026. BKR currently carries a Zacks Rank #2 (Buy).
Oceaneering International (OII - Free Report) supports offshore oil and gas development through services such as subsea robotics, surveys, specialized tools and intervention work. High oil prices could encourage producers to commit more capital to offshore projects and keep rigs active for longer periods. OII is already seeing stronger activity and longer contract durations, which could translate into healthier demand for its ROV fleet and offshore project services. OII currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
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Crude Holds Above $94: Are Oilfield Stocks an Attractive Opportunity Now?
Key Takeaways
Oil prices remain elevated, opening up opportunities for many companies in the space. Several concerns arise, ranging from inflation to broader ripple effects across the economy. However, high commodity prices are prompting investors to allocate money in the oil-energy sector. Let’s delve into the factors that could make oilfield service players attractive to investors.
High Oil Price: Sweet Spot for Oilfield Service Players?
West Texas Intermediate (“WTI”) crude is trading above $94 per barrel. The high prices are being driven by ongoing tensions in the Middle East. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $84.65 per barrel for this year, higher than $65.40 last year. A highly favorable pricing environment for the commodity is likely to continue supporting exploration and production activities.
In this regard, upstream players operating in the Permian, the most prolific basin in the United States, and other promising resources are likely to continue benefiting from the ongoing strength in oil prices. In the outlook, EIA estimated that total crude oil production in the United States would be 13.83 million barrels per day this year, higher than 13.66 million barrels per day last year.
With high prices of the commodity, production will likely increase in U.S. resources and will in turn boost the demand for oilfield services. This is because oilfield service players help explorers and producers to effectively set up oil and gas wells.
BKR & OII: 2 Energy Stocks Worth Betting on Now
Elevated oil prices may encourage producers to keep drilling and production programs active, supporting demand for Baker Hughes’ (BKR - Free Report) oilfield services. Management also sees improving activity across North America, Brazil, Mexico, the Asia-Pacific and parts of Africa. Healthy subsea orders and stronger backlog execution could provide further support, even as overall global upstream spending is expected to ease modestly in 2026. BKR currently carries a Zacks Rank #2 (Buy).
Oceaneering International (OII - Free Report) supports offshore oil and gas development through services such as subsea robotics, surveys, specialized tools and intervention work. High oil prices could encourage producers to commit more capital to offshore projects and keep rigs active for longer periods. OII is already seeing stronger activity and longer contract durations, which could translate into healthier demand for its ROV fleet and offshore project services. OII currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.