OIH has a large 20.7% position in Schlumberger, the world’s largest oil services firm, and a 5% weight to Baker Hughes. IEZ allocates a combined 27.2% of its weight to Schlumberger and Baker Hughes. So far this year, OIH is up 25.6% while IEZ gained 27.4%.
Crucial to near-term upside for the two ETFs will be comments from Schlumberger, Baker Hughes, and next week Halliburton (NYSE: HAL), regarding services demand at various North American shale formations and the outlook for international markets.
Earlier this week, it was reported, that U.S. oil production, already at multi-decade highs, has risen so dramatically that the U.S. is challenging Russia for the title of world’s largest oil producer. Some OIH and IEZ holdings are also flush with cash and those cash hoards could equal more share buybacks and the possibility of increased dividends.
Next is another big one for oil services earnings as Halliburton, National Oilwell Varco (NYSE: NOV) and Cameron International all step into the earnings confessional. That trio represents nearly a quarter of OIH’s weight.
Market Vectors Oil Services
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Max Chen contributed to this article.