OIH Overview

U.S. Military Action: Escalating military actions by the U.S. against Venezuela are influencing global oil markets.

Impact on Oil Prices: The potential for regime change in Venezuela is leading investors to raise oil prices, anticipating access to significant oil reserves.

J.P. Morgan's Upgrade: Helmerich & Payne (HP) received an upgrade to Overweight from Neutral by J.P. Morgan, which anticipates a rebound in Saudi Arabian activity and sees potential for the stock to outperform due to attractive valuations and earnings growth prospects.

Cautious Sector Outlook: Despite the upgrade, J.P. Morgan maintains a cautious stance on the oilfield services sector, highlighting headwinds such as declining capital intensity in North America and a weakening spending picture, which may affect overall performance in 2026.

Stock Selection Importance: Analysts emphasize the importance of stock selection in a challenging macro environment, with companies demonstrating earnings resiliency being better positioned for relative share price performance amid anticipated market loosening.

Mixed Prospects for Offshore Drillers: J.P. Morgan downgraded several offshore drilling stocks due to potential earnings risks and full valuations, while upgrading Liberty Energy and ProPetro as beneficiaries of the growing demand for modular power solutions.

Energy Sector Performance: The energy sector is experiencing a resurgence, with exploration and production stocks beginning to align with equipment stocks.

Leading ETFs: The VanEck Oil Services ETF is leading the sector with an 8% year-to-date increase, followed by the State Street Energy Select Sector SPDR ETF at 6%.

Exploration & Production ETF: The State Street SPDR S&P Oil & Gas Exploration & Production ETF has seen a modest increase of 2% this year.

Market Trends: Overall, the performance of these ETFs indicates a positive trend in the energy market, particularly in oil services and exploration sectors.

VanEck Oil Service ETF Performance: The VanEck Oil Service ETF is up approximately 1.4% on Monday, with notable gains from Noble (up 2.9%) and Liberty Energy (up 2.8%).

Amplify Transformational Data Sharing ETF Performance: The Amplify Transformational Data Sharing ETF is down about 3.2%, with Bakkt Holdings declining by 12.8% and Strategy falling by 10.6%.

Market Overview: The trading day highlights a contrast in performance between the oil service sector and data sharing sector ETFs.

Disclaimer: The views expressed in the article are those of the author and do not necessarily reflect the opinions of Nasdaq, Inc.

Oil Price Trends: Benchmark crude prices, including West Texas Intermediate and Brent, have hit one-month lows due to ongoing U.S.-China trade tensions and fears of a supply glut linked to potential easing of sanctions on Russian oil.

OPEC+ Production Adjustments: OPEC and its allies have increased oil output since April, but have paused further increases through Q1 2026, citing seasonal factors, while still planning a small raise for December.

Energy ETFs Performance: Energy ETFs like XLE and VDE have shown modest year-to-date gains, while XOP has declined; investors are shifting focus to gold and Bitcoin, with significant outflows from energy funds.

Future Outlook: Despite current challenges, energy companies are well-positioned with strong free cash flow, and the International Energy Agency projects steady global oil demand growth through 2035, even as geopolitical risks and U.S. sanctions impact supply dynamics.