Oil prices have been making headlines, as the Iran war shock has pushed commodity prices back toward their glory days. Although the tensions have made the stock market highly uncertain, energy stocks have retained their appeal. Is it time to invest in stocks such as Baker Hughes BKR and Oceaneering International, Inc. OII?
High Crude Price to Aid Oilfield Service Firms?
West Texas Intermediate (“WTI”) crude is hovering around the $100-per-barrel mark. The high prices are being driven by intensifying tensions in the Middle East. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $84.65 per barrel for this year, higher than $65.40 last year. A highly favorable pricing environment for the commodity is likely to continue supporting exploration and production activities.
With higher upstream activities, demand for oilfield services will also increase, since oilfield service players help explorers and producers efficiently drill oil and gas wells. Thus, with high prices of the commodity, production will likely increase in the most prolific basin, which will aid the bottom lines of oilfield service companies.
2 Oilfield Service Firms to Buy Now
Elevated oil prices may encourage producers to keep drilling and production programs active, supporting demand for Baker Hughes’ oilfield services. Management also sees improving activity across North America, Brazil, Mexico, the Asia-Pacific and parts of Africa. Healthy subsea orders and stronger backlog execution could provide further support, even as overall global upstream spending is expected to ease modestly in 2026. BKR currently sports a Zacks Rank #1 (Strong Buy).
Oceaneering International supports offshore oil and gas development through services such as subsea robotics, surveys, specialized tools and intervention work. High oil prices could encourage producers to commit more capital to offshore projects and keep rigs active for longer periods. Management is already seeing stronger activity and longer contract durations, which could translate into healthier demand for OII’s ROV fleet and offshore project services. OII currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).