What happened

Friday was a good day for the broad market, but a great one for oil and gas stocks. Schlumberger Limited (SLB -2.14%) ended today's session up 10.3% following an encouraging third-quarter earnings report, lifting several competitors' stocks with it. Transocean (RIG 2.16%) rallied 5.6% while Chevron (CVX 1.54%) closed 2.5% higher, for instance, capping off a third week of bullishness that could continue into the foreseeable future.

Still, investors will want to carefully pick and choose energy stocks in this environment.

So what

As was noted, Schlumberger's third-quarter numbers deserve the bulk of the credit for Friday's energy stock gains. Revenue of $7.5 billion was up 28% year over year, and operating earnings of $0.63 per-share were 75% better than year-ago levels. Both figures also topped estimates of $7.1 billion and $0.55 per share, respectively. Ramped-up offshore and international drilling produced the bulk of last quarter's growth.

The report, however, was delivered to a market that's already bullish on the sector...and for good reason. West Texas Intermediate crude oil prices inched slightly higher on Friday to nearly $85 per barrel, adding to a rebound effort following the pullback from June's peak near $105 to last month's low of $76 per barrel.

Higher prices could be in the cards, too.

Aside from a likelihood that Russia's president Vladimir Putin will be able to circumvent measures meant to cap the price of oil exported from his country, continued war in Ukraine continues to fuel concerns that supply chains could still be disrupted without warning. In the meantime, President Joe Biden's efforts to cool domestic gasoline prices -- by increasing the available supply of crude -- are proving largely ineffective. Although he intends to release up to another 15 million barrels of oil from the nation's strategic petroleum reserve, investors recognize that's less than one day's worth of the country's average daily consumption of around 20 million barrels of crude, according to figures from the Energy Information Administration. OPEC also recently opted to cut its production of oil to stave off slumping prices, rejecting Biden's request.

Given this backdrop and its broader implications, a large number of research outfits including UBS and Goldman Sachs believe crude prices will remain high or even rise into next year.

Now what

Take any such outlook with a grain of salt, of course. The oil market is impacted by several different factors, most of which are particularly unpredictable right now. That's the Middle East's piece of the supply chain, the West's efforts stymie Russia's invasion of Ukraine, and a fragile global economy that's vulnerable to inflation.

To the extent it can be predicted though, crude oil prices do look more likely to remain at their current levels or even continue inching higher than not.

Even so, investors should bear in mind not all energy stocks are the same. The aforementioned Chevron and Transocean operate major drilling and refining businesses, whereas Schlumberger is predominantly a service provider to drillers. That leaves it less subject to falling oil prices if that's what's in store. Indeed, moderated crude prices could even increase demand for its services, provided consumption of oil remains steady.

That's the long way of saying while Transocean and Chevron may remain too unpredictable for many investors, Schlumberger's solid third quarter suggests drilling activity continues to grow its way back from the pandemic-prompted lull. That's bullish for the company.