The global surge in energy consumption is persistently escalating the demand for energy services. This burgeoning trend could foster sustainable growth within the industry. Therefore, it could be worth investing in quality energy services stocks Gibson Energy Inc. (GBNXF – Get Rating), Ranger Energy Services, Inc. (RNGR – Get Rating), and NCS Multistage Holdings, Inc. (NCSM – Get Rating) now.
Before delving deeper into the fundamentals of these stocks, let’s first briefly familiarize ourselves with the energy services sector.
Despite global economic uncertainties and geopolitical upheavals, the energy sector still exhibits solid fundamentals. The International Energy Agency’s (IEA) latest energy report revealed that global oil demand surged by 3.26 million barrels per day in the second quarter of 2023, reaching a record high of 103 mb/d.
This unprecedented demand growth is anticipated to continue through 2023, spurred by increased summer air travel that elevated high power generation oil usage and a revival in Chinese petrochemical activities.
Exploration and production companies incessantly seek new sources to meet such escalated demands. Services essential to these efforts, including drilling, completion, production, and well intervention, emerge as lucrative channels for leading energy firms.
Historically, upstream oil and gas projects have yielded approximately 15% to 20% returns. With promising long-term demand projections, oil and gas enterprises have amplified their efforts to discover new deposits, reinvesting a portion of the record profits from the surge in fossil fuel prices catalyzed by the Russia-Ukraine conflict.
Moreover, the impacts of tropical storm Hilary and OPEC+ and Russia’s production cuts could keep oil prices high. This market climate is conducive to…
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