- Schlumberger (SLB +0.1%) is not the only oil services stock Goldman Sachs is touting, as the firm also awards Buy ratings to Halliburton (HAL +1.4%) and Nabors Industries (NBR -0.9%) for their cyclical exposure to the U.S. onshore market.
- Goldman's commodities and E&P teams say they now see a clearer path for oil production growth in 2017-18, driven by the market becoming balanced by H2 2016 and demand continuing to grow at a healthy pace, with U.S. onshore and Mideast OPEC as the lead drivers of the production growth.
- The firm likes HAL, SLB and NBR for their cyclical exposure to the U.S. onshore market, and all three have exposure to the Saudi market; HAL and SLB also offer very high leverage to the drilling and uncompleted wells inventory, which sits low on the cost curve and should be the first wells where activity should pick up.