What happened

The price of crude oil tumbled today after members of OPEC wrapped up their recent meeting without announcing a production reduction agreement, with the group saying it's delaying a decision for a day until they meet with some non-members. That uncertainty caused the global oil benchmark, Brent, to fall 2.7% to just under $60 per barrel while WTI, the U.S. oil benchmark, slid 4% to $51.25 per barrel.

That slump in crude prices weighed on oil stocks, with several declining double digits on the day. Among that group was McDermott International (NYSE:MDR), Seadrill (NYSE:SDRL), Transocean (NYSE:RIG), Chesapeake Energy (NYSE:CHK), and Whiting Petroleum (NYSE:WLL).

The word OIL on a display board with a red down arrow next to it

Image source: Getty Images.

So what

McDermott International, Seadrill, and Transocean are all oilfield services companies, which means they help other oil companies produce oil, with all three focusing on the offshore drilling market. The reason the stock prices of this trio are getting walloped today is that lower oil prices will likely impact the spending capacity of oil producers, meaning less work for these service companies. That would keep pressure on their profitability.

Adding further weight to Transocean's slide is that the company closed its merger with Ocean Rig yesterday. Investors received a mix of cash and stock in the deal, which likely led some to sell their shares of Transocean upon receipt. That additional selling pressure, when added to lower oil prices, pushed this offshore driller deep into the red today.

Meanwhile, Chesapeake Energy and Whiting Petroleum were under pressure due to the continued slump in oil prices, which will directly impact their cash flows. Chesapeake Energy currently produces more natural gas than oil. However, it has been focusing the bulk of its drilling efforts on boosting its oil output, and recently made a bold bet to buy an oil-focused company to accelerate its oil growth engine. That move is starting to look ill-timed, given the plunge in crude prices in the last month.

Whiting Petroleum, on the other hand, already makes most of its money producing oil, which is why the slump in crude is putting pressure on its stock price. That sell-off is overshadowing the fact that analysts at Stephens initiated coverage on Whiting today and gave it an overweight rating while setting a $54 price target, implying more than 90% upside from the current price. Stephens has a positive view not only of Whiting but also of the exploration and production market overall, which makes it a contrarian in the current bear market in crude.

Now what

While OPEC didn't announce a production-reduction agreement today, that doesn't mean it won't when it meets with nonproducers on Friday. The group has reportedly agreed to a production cut -- rumored to be around 1 million barrels per day -- which would help keep supplies more in line with demand. If that's the case, then it could finally put a floor under oil, as well as the stock prices of these oil companies.

Matthew DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.