Jefferies Downgrades Oil Services Stocks After Cutting Brent Forecasts

Jefferies on Tuesday downgraded Schlumberger Ltd , Oceaneering International Inc. and Nabors Industries Ltd. , as it lowered its Brent oil price forecasts an average 16% for 2015, 2016 and 2017. "With our modest positive 2016 backdrop, and given our conviction in onshore spending's role in medium and longer term oil supply, several (although not all) U.S.-levered names appear oversold," analysts wrote in a note. "We remain concerned about longer-term deepwater development in light of oil prices vs. cost structures." Jefferies is expecting oil prices to remain under pressure from temporary oversupply and sluggish global economic growth through the first half of next year. Schlumberger shares were indicating lower in premarket trade, and are down 6.6% in the year, while the S&P 500 has gained 12%. Oceaneering International shares are down 21.5% in the year so far, while Nabors has lost 33.7%.

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