Merrill Lynch on Thursday said it cut its rating on oil drilling companies Rowan Cos Inc.
, ENSCO International Inc.
and Global Marine Inc., citing slack demand in the Gulf of Mexico drilling market.
In a research note, Merrill cut its near-term rating on all three to "neutral" from "buy." Merrill pointed out that the offshore drilling stocks have fallen "significantly" from their highs, but added "these stocks will most likely not rise until rig demand increases and pricing stabilizes."
Merrill said that it previously believed drilling demand would improve by the late part of 2001, but it now looks as though that will not occur until early 2002.
Shares of Global Marine were down $0.33 cents at $15.30. ENSCO was down $0.27 cents at $18.63, while Rowan was down $0.06 at $16.95 on the New York Stock Exchange.