After suffering a brutal past few months, the offshore-drilling sector looks set to rally...
For much of the past three years, the price of crude oil has stayed
stubbornly above $95 per barrel. It's amazing when you consider that in
2004, oil was just $40 a barrel.
These persistently high prices have produced terrific business
conditions for companies that supply drilling equipment and services to
large oil firms. According to Barclays research, global oil and gas
exploration spending has increased by $291 billion (nearly doubling) in
the past five years.
However, over the past few months, some of the world's premier offshore-drilling companies
have gotten hammered. Shares of Transocean, the leading
deepwater-drilling company, have fallen around 20%. The other giant
deep-water specialist, Diamond Offshore, is down over 30%. (more)
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