The Philadelphia Oil Service Sector Index (^OSX) is a stock index which tracks fifteen large companies in the oilfield services industry. Changes in the Philadelphia Oil Service Sector Index tend to be associated with changes in the oil and gas markets, since greater exploration and construction of wells occurs when oil prices are high and less such activity is carried on when prices are lower. Because several companies on the exchange are implicated in or affected by the BP Gulf of Mexico oil spill at Deepwater Horizon, the index has suffered substantially over the past several months.
Currently, the Philadelphia Oil Service Sector Index consists of Baker Hughes (BHI), the world’s third-largest multinational oilfield services company; Cameron (CAM), a drilling, valve and pressure control, and compression equipment provider; Global Services (GLBL), an offshore drilling company; Halliburton (HAL), the world’s second-largest oilfield services company; Lufkin Industries (LFUK), a pumping unit manufacturer; Nabors Industries (NBR; formerly Anglo Energy), an onshore and offshore drilling company; Noble Corporation (NE), an offshore drilling company; National Oilwell Varco (NOV), an oil rig producer; Oceaneering International (OII), a marine engineering and aerospace company; Rowan Companies (RDC), an onshore and offshore drilling contractor; Smith International (SII), an oilfield equipment provider; Schlumberger (SLB), the world’s largest oilfield services company; Transocean (RIG), the world’s largest offshore drilling contractor; Tidewater (TDW), a marine services contractor which specializes in the offshore oil industry; and Weatherford International (WFT), a general oilfield service company.
As one might expect from the industry, the Philadelphia Oil Service Sector Index is heavily weighted towards Texan companies, where fully eight of the fifteen companies are based. Four others are based in Switzerland (one of which, Weatherford, was formerly another Texas company), while two are in Louisiana and the last is in Bermuda.
The Philadelphia Oil Services Sector has had a rough past few years. It peaked at just under 366 in July 2008, before collapsing down to a low of 97 that December. Since then it has been staging a recovery. However, the recovery ended in spring 2010 following the BP oil spill in the Gulf of Mexico. In part this simply reflects increased nervousness over the future operations of the large number of companies on the index which are heavily invested in offshore drilling. However, it also reflects the more specific involvement in the Deepwater Horizon project of contractors Halliburton, Cameron, and Transocean. The Philadelphia Oil Service Sector Index lost over one-quarter of its value following the BP oil spill.