Oil services stocks briefly sold off before bouncing back Thursday, as two catalysts pushed them down: an incident surrounding an oil and gas production platform off the coast of Louisiana and uncertainties about the future of offshore drilling.
Separating fact from fiction, the "Fast Money" traders got to the bottom these concerns with reporting from CNBC's Scott Cohn on the incident in the Gulf and an interview with the CEO of a company that's filed a lawsuit to stop the moratorium on offshore drilling.
A platform operated by Mariner Energy caught fire as 13 crew were painting and sandblasting the facility, which is in 300 feet of water in the Gulf of Mexico, reports Cohn. All seven wells, which the platform services, were shutoff and no oil has leaked from the site.
Initial reports suggested there was an explosion, which triggered fears on another incident, similar to that of the BP oil spill. Jittery investors sold shares of Mariner Energy and the stock fell sharply. The stock bounced back after CNBC reported there was no explosion. This is a good example of why investors should avoid trading headlines, said Pete Najarian, co-founder of optionMONSTER.com.
Apache , a Houston-based oil and gas exploration, development and production company, agreed to buy Mariner for $2.7 billion in April. News of Thursday's incident initially sent its shares lower too, but Guy Adami of Drakon Capital doesn't think it will affect the merger.
Adami maintained that if Apache trades below $90 a share, it's a buy. He said it flirted with those levels after news broke about the incident in the Gulf, but is still attractive if you like natural gas and want exposure in the space.
Looking at the oil services space overall, Steve Cortes of Veracuz said there won't be any new offshore exploration near the US in the near future, as a result of the BPoil spill. Cortes recommends looking at foreign offshore exploration, including Petroleo Brasileiro and PetroChina. He also likes domestic onshore names, like Oasis Petroleum .