×

Oil stocks give 'good selling opportunity': Expert

A rise in oil prices sent some large-cap energy stocks higher Tuesday, but the brief pop marks a "good selling opportunity" rather than a rebound for the battered sector, one industry analyst said.

West Texas Intermediate crude settled more than 1 percent higher Tuesday, and shares of ExxonMobil, Chevron and British Petroleum—all hit hard by a nearly 50 percent dip in U.S. crude in the last year—rose more than 3 percent. But investors may want to dump those stocks as prices could stay in a low range for six months to a year, said Fadel Gheit, a senior energy analyst at Oppenheimer.

"I do believe that oil prices are going to be lower for longer," he said in a CNBC "Power Lunch" interview Tuesday.

Technicians prepare oil drilling equipment to be used at Vaca Muerta Shale oil reservoir in Loma Campana. YPF has an agreement with US Chevron to exploit Vaca Muerta.
Juan Mabromata | AFP | Getty Images
Technicians prepare oil drilling equipment to be used at Vaca Muerta Shale oil reservoir in Loma Campana. YPF has an agreement with US Chevron to exploit Vaca Muerta.

The price climb did not reflect any fundamental change in the market, Gheit noted. He added that "ample" supply and "very weak" demand will hold prices down for the immediate future, and big oil stocks will likely continue to struggle.

Read MoreBP warns on oil price after announcing $6.3B loss

While crude may remain under pressure, some companies can still thrive in that environment, contended Ken Sill, managing director and senior oilfield services analyst at Global Hunter Securities. He pointed to service companies with what he deemed "good balance sheets," including Schlumberger, Halliburton and Superior Energy Services.

Disclaimer

Disclosure: Ken Sill owns Schlumberger stock.