Sector Snap: Oil services companies rebound

Stock for the service providers has fallen along with the price of oil in recent days. In the past three trading sessions, oil prices have fallen $11.

The Organization of the Petroleum Producing Countries, which controls 40 percent of the world's oil supply, called a special meeting Friday in Vienna, Austria.

Analysts say OPEC could decide to trim output by as much as 1 million barrels a day in a bid to put the brakes on the slide, in addition to a 500,000 barrel per day cut announced last month.

In a research note published Friday, Credit Suisse analyst Brad Handler said his group has forecast a $75 per barrel price for crude oil in 2009 which could have a negative impact on the oil services sector.

The group also revised estimates for North America revenues in 2009 because of concerns about the balance in supply and demand which could limit oil producers' exploration and production budgets. The revenue forecast now is an 11 percent decline year over year.

In a conference call Friday with analysts, Schlumberger Ltd. Chairman and Chief Executive Andrew Gould predicted a global economic slowdown would take a toll on his company in the fourth quarter. Houston-based Schlumberger is the world's largest oilfield services company.

"It is still too soon to predict to what extent current events will affect overall activity in 2009, but we anticipate a slowing in the rate of increase of our customer spending," Gould said. "Nobody knows how deep the drop in demand is going to be, but there is a limit to the drop in demand unless we have a sort of worldwide depreciation that's going to last 10 years."

In afternoon trading, shares of Schlumberger fell $1.26, or 2.4 percent, to $51.94 a share but other providers saw stocks rebound.

Shares of Halliburton Co. rose $1, or 5.7 percent, to $18.70; Rowan Companies Inc., up $2.29, or 13.1 percent, to $19l.59; Pioneer Drilling Co. was up 52 cents, or 7.2 percent, to $7.77; and Allis-Chalmers Energy Inc., was up 56 cents, or 8.9 percent, to $6.77.