Barclays’ coverage initiation on the oilservice sector last week could very well be summed up in two words: budget cuts.

The London-based banking company says approximately 90% of the oilservice group is historically correlated to oil prices, and the dropping price will result in reduced budgets for E&Ps in the upcoming year. With less available capital for E&Ps, the oilservice companies will be affected by the ripple effect of dialing back operations.

According to a survey of 225 companies in Barclay’s annual E&P Spending Out...

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