Oilfield service stocks start 1999 strong

Despite concerns about depressed oil prices and rig shut downs U.S. drilling and oilfield company service stocks started off strong in 1999, after losing ground in 1998.

According to a Jan. 7 Reuters report, the “Philadelphia Stock Exchange’s OSX Index of oilfield service stocks rose 6.2 percent” on Jan. 7 “to 61.03 points; the index has surged 18.4 percent so far this year.”

In comparison, reported Reuters, “the broadly-based S&P 500 Index, which closed slightly lower” on Jan. 7, “is up just 3.3 percent so far this year.”

In 1998, the OSX Index fell almost 55 percent, reflecting a drop in crude prices.

Analysts attributed the gain, in part, to a brief rally in crude oil future prices as a result of a huge draw on U.S. inventories in the last week of December and first few days of January due to a drop in temperatures in the Northeast.

Another factor is thought to be recent oilfield stock purchases by investment portfolio managers who are looking for good buys in an otherwise high-priced market.