The increased demand for energy services, driven by rising oil and gas exploration and production worldwide, could keep the energy services industry on a positive growth trajectory.

Given this backdrop, let us explore energy services stocks ChampionX Corporation (CHX – Get Rating), MRC Global Inc. (MRC – Get Rating), and Geospace Technologies Corporation (GEOS – Get Rating), which are rated B (Buy) in our proprietary POWR Ratings system.

But before we delve deeper into the fundamentals of the stocks mentioned above, let us first briefly discuss the energy services sector.

Paris-based International Energy Agency (IEA) projects that global oil demand will grow by 2.4 million barrels per day (bpd) in 2023 and hit a record 105.7 million bpd by 2028, mainly driven by aviation and petrochemicals.

In addition, an oil supply crunch could be induced by the OPEC+ oil production cut continuation until the end of 2024 and Saudi Arabia’s voluntary oil production cuts by 1 million bpd starting in July.

According to Wood Mackenzie, the oil and gas exploration and production industry is expected to allocate a $470 billion capital outlay in 2023 to uplift the sector. As per Energy Information Administration’s (EIA) Short-Term Energy Outlook, U.S. crude oil production could gain 720,000 barrels daily this year, up from a previously forecast growth rate of 640,000 bpd.

Anticipating an increase in natural gas production in the Permian Basin in the short term, EIA Administrator Joe DeCarolis, said…

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