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Oil Services are Making a Move

David Becker
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www.iforex.com

The oil services sector seems to be one of the best market performers even during the recent market slide. Oil Service Company’s generate revenues from drilling platforms that they set up for oil and gas producers and explorers, charging day rates that reflect what the market will pay.

Every March, Howard Weil a broker has a conference which is attended by many industry players in the oil service sector. Many of the leaders are discussing how well their businesses are performing including Schlumberger, and Baker Hughes.

On Monday, Schlumberger Ltd the world’s largest oilfield services company, said that expects Q1 earnings to be much higher than in the same period last year, as it takes market share from rivals and cuts costs.

According to the company, which spoke at the Howard Weil conference in New Orleans, much of the growth will come from state-owned and independent energy companies that are spending to develop shale and other resources around the world.

The oil sector ETF (OIH – Market Vectors Oil Service), is attempting to breakout above current resistance which near the $49.5 level. The recent positive price action in oil prices led by the spill of oil near the Houston Ship Channel has generated positive momentum behind the oil service sector. Momentum on the OIH is strong with the MACD (moving average convergence divergence) index generating a buy signal. This occurs as the spread 9the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread.

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