The pick-up in crude oil prices is expected to help oil equipment providers in getting more orders. We expect crude prices to test $90 a barrel soon, and this will eventually bring demand for equipment suppliers.
Generally, offshore activities are more expensive than onshore activities. When crude prices fall, oil equipment makers incur losses and vice versa.
Now, with crude prices moving northward, we expect companies to perform well.
Irrespective of whether Opec (Organisation of Petroleum Exporting Countries) will decrease or increase crude production, the tension between Iran and the US may impact oil prices going forward. And this will help oil equipment stocks. Problems with oil supply from Russia may also influence oil prices. We are bullish on this counter.
Companies in this sector are likely to come up with healthy results on the back of improved orderbooks.
This is an extract form an article at http://www.mydigitalfc.com/news/crude-price-rise-good-news-oil-equipment-suppliers-641
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