A recent report from Lehman Brothers found that global offshore drilling budgets are set to grow more than 10 percent in the coming year. The survey, which utilized the opinion of 320 oil companies, indicated that primary drivers for growth will be the North American offshore drilling market, with the U.S. and Canada expected to spend 15.7% and 28% more respectively. Spending outside of North America is not expected to expand so rapidly.
The findings have sparked a mini rally among the offshore oilfield services stocks, a volatile group which has enjoyed a healthy 1999 nonetheless.
Crude oil, gasoline and heating oil all posted big gains on the New York Mercantile Exchange on Wednesday after industry data showed a huge decline in oil and refined products stored in the U. S., the world's biggest oil consuming nation. Buoyed by this news, January crude oil futures in New York closed 63 cents higher at $26.36 a barrel, while January gasoline futures closed 15.4 cents firmer at 71.30 cents a gallon. The bullish tone in the oil markets gave energy stocks a boost, but as is often the case, the move was more pronounced for oilfield service and drilling stocks than for oil producers.
Among service companies Halliburton Co. rose 2-2/16, or 6.1 percent, to 37-3/16,
while Baker Hughes Inc. gained 1-7/16, or 7.9 percent, at 19-5/8. Offshore driller Noble Drilling Corp. closed up 1-9/16, or 6.1 percent, at 27-1/4.