In the past year, Schlumberger (SLB) stock has risen 7% as of March 17, 2017. During that period, SLB has underperformed the VanEck Vectors Oil Services ETF (OIH), an ETF tracking an index of 25 OFS (oilfield equipment and services) companies, rising 11%. The Energy Select Sector SPDR ETF (XLE), the broader energy industry ETF, has risen 9% in the past year.
Schlumberger has also underperformed the SPDR S&P 500 ETF (SPY), which has risen 16% during the same period, while the Dow Jones Industrial Average (DJIA-INDEX) has risen 19%.
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In the past year, the WTD (West Texas Intermediate) crude oil price has recovered 21%. The hike in crude oil prices partially explains OIH’s rise. The rise in crude oil prices has also prompted a rival in the US rig count, which has risen 66% in the past year. (For more on what could drag crude oil prices down, check out Market Realist’s series Exhausted Energy: Why Energy ETFs Could Plunge.)
Exploration spending for North American upstream producers could actually rise by as much as 30% in 2017, while higher US upstream activities could improve oilfield service companies’ prices and margins.
For more on how large-cap OFS companies like Halliburton (HAL) and National Oilwell Varco (NOV) have been faring, check out Market Realist’s series Energy’s Price Recovery Prompts an Oilfield Services Revival. You might also look into Market Realist’s Halliburton Stock Faces Headwinds amid a Strong Performance.
In this series, we’ll look at SLB’s correlation with crude oil, investors’ short interest in SLB’s stock, and analysts’ recommendations.
Let’s start with SLB’s implied volatility in the next part.