Oil is still within spitting distance of an all-time high, and natural gas is still well above long-term price trends. Yet the oil services ETF is off about 20% from its highs. Oh, those kooky markets. At least BJ Services
The second-quarter report from this pressure-pumping specialist nearly mirrored that of the first quarter. Revenue was up 37% year over year (up 36% in the first quarter), and operating income climbed 87% (84% in the first quarter). Eerie, huh?
As we heard from Halliburton
What's more, when you consider the grief that companies like ExxonMobil
Will energy prices drop at some point in the future? Yeah, probably. Will more competition and supply come into the service market to mop up this demand and these soaring rates? Sure. Will that happen next month? No. Next year? Maybe. And therein lies the problem -- figuring out the tipping point between the up-cycle and down-cycle is something that I don't think anybody has ever managed to do successfully -- at least, not more than once.
In the meantime, I'll just say again what I've said before about energy services -- the wild-and-crazy easy money has long since been made. That doesn't mean there isn't more money to be made, but it's going to be harder and riskier. Invest carefully, fellow Fools, lest the energy boom blow up in your face.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).