Schlumberger NV (NYSE:SLB) shares are trading higher by 1.2% to $61.28 Monday afternoon. The stock is trading higher after oil surpassed $90 per barrel.
Shares of several oil and oil-related companies are also trading higher in recent sessions after OPEC maintained its growth forecasts and forecasted a supply shortfall.
Schlumberger is a leading oilfield services company that provides a wide range of services and technologies to the oil and gas industry. When OPEC predicts a supply shortfall, it suggests that global oil supply may not meet demand.
When the price of oil rises, oil and gas companies may increase their drilling and exploration activities to take advantage of higher selling prices for their products.
This increased activity can lead to higher demand for Schlumberger’s services, such as drilling, well completion and reservoir management, which can boost the company’s revenues and profitability.
See Also: How To Invest In Oil
Bloomberg says this is mainly due to Saudi Arabia’s extension of production cuts. Despite tightening market conditions, Saudi Arabia has prolonged an additional 1 million-barrel-per-day output reduction until year-end.
OPEC’s forecasts indicate a sharp drop in world oil inventories, with a projected decline of around 3.3 million barrels per day in the next three months, potentially the largest since 2007, as analyzed by Bloomberg based on OPEC data.
According to data from Benzinga Pro, SLB has a 52-week high of $62.12 and a 52-week low of $33.80.
