Oilfield services stocks fell
Oilfield services stocks lost the most in the energy space in May. Halliburton (HAL) fell ~25%, while Schlumberger (SLB) and National Oilwell Varco (NOV) fell 19% and 20%, respectively. Helmerich and Payne (HP) fell 16%, while Baker Hughes (BHGE) outperformed its peers and fell 11%. The VanEck Vectors Oil Services ETF (OIH) fell 22% in May. The above five oilfield stocks form ~49% of OIH.
Oilfield services stocks have fallen out of investors’ favor due to expectations of reduced capital spending by oil producers—oilfield services companies’ main customers. Reduced exploration and production activity means lower demand for oilfield services. A 16% fall in crude oil prices in May soured investors’ sentiments towards the sector. Volatility in broader markets and a ~6.4% fall in the S&P 500 Index made things worse for oilfield stocks.
Oilfield services stocks have underperformed the broader markets in 2019. Halliburton and National Oilwell Varco have fallen ~20% in 2019. Schlumberger has fallen ~4% YTD (year-to-date). While Baker Hughes is flat, Helmerich and Payne has risen 2% in 2019. The oilfield services sector has underperformed in 2019 despite an 18% rise in crude oil prices and an ~10% rise in broader markets YTD.
To learn more about the latest factors driving oil prices, read Oil Is Heading for the Second-Highest Weekly Loss in 2019. To learn about institutional activity in oilfield services stocks, read Schlumberger: Changes in Institutional Ownership.