Oil Services Top S&P Gainer in 1st Half of '09

" Oil services at the top sector Gainer in the S&P for the first half of the year and we are six days away from the formal conclusion of the percent so it's fair to do this now. Good does pull back just a little bit of the question is whether these stocks will be able to. Rise in the second half Stevens and -- oil services analyst with Jefferies and ever -- with us tonight -- nymex this morning. As Stephen. Do you think that this sub run can continue and do we really need to look at the price of crude oil as the main driver for these stocks."

" Good morning. I do you think -- crude oil is a big driver particularly in the short term. If you look at history the group is volatile around crude oil prices obviously -- up 50% this year. And your sex is vastly outperformed that's been key driver."

" Sharon not only help though and I think you also have to look at some of these key players in the oil services as energy services companies like Halliburton for example. Then have a significant north Americans and gas play that there have to be concerned about the fact we have natural gas here. Below four dollars is significant and could probably hinder. There upside potential went forward even more than oil around sixty. Dollars a barrel."

" I'm curious as to do."

" Hard drive best phrase this. For a few months ago I thought I was slam dunk. Now. Are -- that China always says stockpiling they don't really want oil. It -- the long term is not bright floral -- Gloria why oil services I think the answer resume one. Says Steve and you must assume the long term bright royal."

" We do you do you think they want them very positive for crude oil. I think the most important point you have to realize is that on the natural gas side we found a lot of new -- in this country when we cracked the code on the shelf side. When you look at crude oil world oil production has been very weak for the last several years we're simply not meeting the requirements of incremental demand. With China may be expanding -- much as they have. No we are struggling to keep up on the supply side we've had a big retrenchment in the man who we truly believe that we're not the man returned. Good to see oil continue to move higher. But I but I do believe that you -- short term they'll -- can act as a barometer for for views on the economy over the next couple months."

" And -- you know what oil demand does come back we're going to look at these oil services company's first of course before even the EMP company. They've got to get you know the drilling going first and so they're probably going to see the upside in the recovery and that's the place you want to be. If you're anticipating recovery perhaps end of this year beginning of next."

" Steve and I these companies ready -- to they have the equipment. And it during the economic slow lemon oil falling so dramatically it's possible a lot of tax cut back on capital spending some of the demand comes back some may be ready others may not be ready to -- it."

" I I think oil server side they actually have the equipment they have too much of North America. Believe it when you look at it actually feel the company's best exposed to the deep water secular growth trends like Cameron International."

" You look at companies that are well exposed to it to the international markets in general like Baker Hughes in Weatherford."

" And I want to return this issue of long term problem because that's what governs. Eventually obvious companies do. As time goes by. As we wait for demand to pick up again. As as each month this year. Aren't we moving closer to natural gas. Replacing. The use of oil and many many. Venues."

" I think that's a long term problem I do think over the over the next five to seven years oil's going to continue to be dominated. You look at oil the transportation fuel for example and it dominates around the world that's not going to change overnight that notwithstanding what the government policies are. -- you're right as you look further out nowhere very rich natural gas in the US. I do think from the North American perspective you will see some change but don't forget your two point four billion people in China and India. Or going through industrialization. Of the US went through -- twenties and thirties that's going to drive a lot of oil demand over the."

" And keep in -- these companies are well aware of the fact that natural gas is going to be. Very strong in the next couple of years as well and that's why there. Firmly in the natural gas well as well again I go back the fact that -- oil services company but they're also more broadly energy services companies. So they're in both. And so when demand comes back for natural gas or oil. If you're an -- company that is in both well you'll be well positioned."

" That's that's an excellent point effective emergent. John Robertson Stephens our Hudson's Carl thank you very."