3 Oil Services Stocks that Look Attractive: Expert
Oil drillers and tankers should be on investors' radars right now, said Omar Nokta of Dahlman Rose. He explained why these stocks are looking attractive — and offered his favorites now.
“We’re starting to see a huge improvement in the offshore drilling space,” Nokta told CNBC.
“With oil prices having recovered and being strong for the last 6 months, we’re starting to see a lot of oil and gas companies increase their spending and budgets for next year."
"That bodes very well for the offshore drilling sector because they’ve been seeing a lot of capital go away from them this year, and now we’re starting to see the beginnings of a recovery.”
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Nokta said stability in oil prices is important in order for exploration and production companies to benefit.
“As oil was in freefall, you saw E&P companies hold back spending because they had no idea where the prices would be,” he said.
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“Volatility will always be there—the big key for us is for the past 6 years, oil has been pretty expensive by historical norms, yet global proven reserves have grown by maybe 1 percent on average each year."
"That compares to 10 years ago in the last oil spike we had in the last 90s where within the year of high oil prices, reserves grew by 17 to 18 percent.”
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Nokta does not own shares of NE, RDC or FRO.