Amid a series of light volume sessions, the PHLX Oil Service Sector Index (OSX) rebounded off key trend line support at 281.92 and resumed its upward trend. An upward revision to Q2 GDP to 4.2% from 4.0%, supported by a rise in personal consumption, a jump in exports and an increase in private inventory investment came as an unexpected surprise as week. In addition, a larger-than-expected 2.1 million barrel decline in U.S. commercial crude oil inventories last week combined with a smaller-than-expected 75mm bcf addition to U.S. natural gas storage (leaving the current level of natural gas in storage 16.5% below the average of the last 5 years for the same week) also helped.
Moreover, increased geopolitical tensions during the last week of August apparently began to unsettle energy investors particularly with the threat of increased sanctions potentially being levied against Russia by the European Union.
Technically, the PHLX Oil Service Sector Index (OSX) appears to be getting into position to push higher and take aim at key trend line resistance sitting at 313. For reference, a break above the 313 level (if it were to occur) could lead to a move toward upward sloping trend line resistance currently sitting at 334.
Impressive gains were scored on Friday by a number of oil service stocks including: Core Laboratories NV (CLB, up 1.03%); Helmerich & Payne, Inc. (HP, up 1.92%); Nabors Industries Ltd. (NBR, up 3.62%); National Oilwell Varco, Inc. (NOV, up 1.18%); Rowan Companies plc (RDC, up 1.51%); and Weatherford International plc (WFT, up 1.50%) with a number of other names rising by more than 0.50% on the day as well.