Just under half the energy stocks in the S&P 500 have reported Q3 2019 results so far including Schlumberger and Halliburton, the world’s two diversified services majors.

What’s emerged is a clear divergence in performance – growth in international markets and continued pressure on profit margins and growth in North American shale. The international spending upturn is now well underway, which is particularly encouraging when you consider the historic drop in international oilfield spending between 2014 and 2018.

And despite the shale services bust in Q3, we’re seeing some reasons for optimism in North America including industry capacity rationalizations and a change in the way producers contract for services.

In this issue, we’ll take a deeper dive into the services business and some of the comments from both Schlumberger and Halliburton on their Q3 2019 conference calls. We’ll also examine one of the most powerful but overlooked potential upside catalysts for energy stocks in the year ahead.