3 Oil & Gas Drilling Stocks Bucking a Bearish Industry Trend

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markets open in 1h 22m S&P Futures 7,866.50 +10.75 +0.14% Dow Futures 52,079.00 +144.00 +0.28% Nasdaq Futures 30,758.00 -33.50 -0.11% Russell 2000 Futures 2,805.40 +5.30 +0.19% 10-Yr Bond 5.22 -0.02 -0.44% VIX 15.36 +0.09 +0.59% Gold 4,163.00 -14.30 -0.34% Bitcoin USD 83,585.94 +323.94 +0.39% Crude Oil Nov 26 95.73 +1.59 +1.69% US Private Equity 10,967.34 -1.52 -0.01% ADVERTISEMENT 3 Oil & Gas Drilling Stocks Bucking a Bearish Industry Trend Nilanjan Choudhury August 14, 2026 7 min read HP NBR PTEN The Zacks Oil and Gas - Drilling industry faces a mixed near-term outlook.

Demand for advanced rigs remains healthy, with tight super-spec supply supporting utilization, day rates and longer contracts.

Still, commodity-price swings could quickly curb drilling budgets, particularly among smaller producers, while geopolitical tensions and policy changes threaten international projects.

These concerns are reflected in the industry's discouraging Zacks Industry Rank, alongside a sharp decline in 2026 earnings estimates.

Valuation is another concern, with the group trading at a premium to both the broader energy sector and the S&P 500.

Yet, performance has been strong, with the industry gaining 68.9% over the past year.

Amid these crosscurrents, select names look better positioned.

Patterson-UTI Energy PTEN, Nabors Industries NBR and Helmerich & Payne HP stand out through advanced assets, international opportunities, technology investments and improving earnings prospects.

The Zacks Oil and Gas - Drilling industry consists of companies that provide rigs (or specialized vehicles) on a contractual basis to explore and develop oil and natural gas.

These operators offer drilling rigs (both land-based/onshore and offshore), equipment, services and workforce to exploration and production companies worldwide.

Drilling for hydrocarbons is costly and technically difficult, and its future primarily depends on contracting activity and the total number of available rigs at a given time rather than the price of oil or gas.

Within the energy industry, it's interesting to note that the volatility associated with offshore drilling companies is much higher than that of their onshore counterparts, and their share prices are more correlated to the price of oil.

Overall, drilling stocks are among the most volatile in the entire equity market.

Tight Supply of Advanced Rigs Strengthens Industry Pricing: Modern drilling programs increasingly involve deeper wells and longer horizontal sections, requiring larger, more capable rigs with better automation and digital technology.

Yet, the supply of this high-end equipment is limited.

regions, quality rigs are already effectively sold out, while super-spec utilization across the market is very high.

This imbalance can give drilling contractors greater pricing power as activity rises.

Importantly, operators also appear willing to sign longer-term contracts for upgraded equipment because more efficient rigs can lower drilling costs.

Rising utilization, stronger day rates and longer contracts could therefore improve industry margins even without a dramatic increase in the overall rig count.

Commodity Volatility Could Quickly Cool Drilling Spending: The industry's improving outlook still depends heavily on supportive oil and gas prices.

Recent geopolitical developments have caused sharp swings in crude prices, making future pricing and customer activity harder to predict.