Although many investors have been focused in on oil markets and major oil producers such as ExxonMobil this week, many of the oil service companies have also been surging as well. Broad ETFs tracking this market segment have risen by more than 4% in just three days of trading, as many investors have bought up these companies in anticipation of a wave of new projects thanks to near $100/bbl. oil and continued tension in the Middle East, two factors which make excess exploration more likely. This trend looks likely to boost investor demand for oil service firms and increase expectations for their full year outlook, since no matter how successful the exploration operations are, extra drilling for oil will boost the need for various auxiliary services.
While Halliburton and Schlumberger reported solid earnings a few weeks ago, it will be especially interesting to see how another giant in the field, National Oilwell Varco
One fund that looks to be in focus given this crucial earnings report is the PowerShares Dynamic Oil Services Fund
Nevertheless, all investors in the oil service industry will likely be paying close attention to NOV's report later today in order to see just what the industry believes can come about thanks to higher oil prices and tensions in one of the world's most important energy producing regions. Should the company manage to surprise on the upside, look for NOV to help push PXJ higher on the day. If, however, NOV is unable to impress investors with its plans for the new year, look for many to exit the company for others in the industry that have been able to produce more robust levels of growth both in terms of earnings and revenues [see holdings of PXJ here].
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