Oil service companies surge on brighter outlook

NEW YORK/PARIS (Reuters) – U.S. and European oilfield service companies brought a glimmer of optimism to the hard-hit sector on Thursday, beating earnings expectations and raising hopes that oil and gas producers could restart stalled spending programs.

France’s Technip (TECF.PA) posted a surprise increase in second-quarter profit, while U.S.-based offshore driller Diamond Offshore Drilling Inc (DO.N) easily beat Wall Street earnings forecasts, and both companies’ shares gained.

The sharp fall in oil prices from a record $147 per barrel a year ago has forced exploration and production companies to rein in spending on new wells and press for price cuts from the service companies that help them tap into new supplies.

But the steady rebound in oil prices from lows hit early in 2009 and cost-cutting efforts have helped ease the pain for the oilfield service sector.

Reuters