Oil Services Stocks Rebound: Valaris, Baker Hughes Lead Recovery

Amid low energy prices battering the broader energy sector, oil services stocks are leading the rebound. Technical indicators signal sustained upward momentum, while improving fundamentals—driven by rising capital expenditures in oil exploration—provide dual tailwinds for the industry’s recovery.

The VanEck Oil Services ETF (OIH) surged 19% over the past three months, starkly outpacing the Energy Select Sector SPDR ETF’s 6% gain. Both funds, however, have struggled year-to-date in 2025: the broader energy ETF edged up marginally by 2%, while OIH declined 7%. Trading at $251 on Wednesday afternoon, OIH tested the $250 level for the third time in recent weeks—repeated pressure at this threshold suggests an imminent breakout.

Despite a double gap-down plunge in early April that erased nearly 25% of value in two sessions, bulls highlight a pattern of higher lows since then as early evidence of recovery. Several individual stocks now exhibit robust momentum.

Standout Performers

Valaris (OIH constituent)

• Boosted by activist investor interest early in 2025, the energy equipment stock skyrocketed 65% over three months.
• Its breakout above $50 (trading at $50.77 Wednesday afternoon) confirms a bullish inverse head and shoulders pattern, setting a potential rally toward $75.
• This would approach the critical $80 resistance zone—a level that repeatedly capped gains in 2023 and 2024.

Baker Hughes (OIH’s second-largest holding)

• Soared 11% to $44.45 on Wednesday afternoon following strong earnings, decisively breaching a bullish ascending triangle pattern.
• If sustained, the rally could mark its best weekly gain in nine months.
• Shares now trade just 10% below their 52-week high, significantly outperforming peers Schlumberger (29% below peak) and Halliburton (37% below peak).

Contrarian Investing Funds Natural Gas Oil & Gas