Investors Eyeing Oil-Services Stocks in 2020

There may be light at the end of the tunnel for underperforming oil stocks as we head into 2020.

Investment firms are touting oil-services companies as the break out stocks next year. One expert insists a rebound in U.S. shale exploration in the second half of 2020 should help companies that service the big energy names.

Kym Bolado, host of “In the Oil Patch” radio show, still urges caution.

“It's not as simple will North American shale producers do, or how are they going to shake out or fare,” she says. “When we're talking about what's going on with China, we also have to think about the sanctions that are coming on with Iran.”

The U.S. has long been sitting on a supply of crude, and the sector is still facing its third straight year of negative underperformance.

“As we start using that supply, that also starts freeing up a dollar amount the energy will run at,” she says. “We see a slowdown in shale production right now, which will have an outcome on the global market in the future.”

Bolado says we could see moves that would possibly open the flood gates in the next couple years.

“OPEC meeting and agreeing to continue their cuts was a good indicator. Phase One in the China trade deal is also a very positive thing for the energy sector,” she says.

“If we could get through and get something solidified with China that would be great also.”

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