Why Schlumberger Limited Stock Dropped 19% in February
Shares of Schlumberger Limited (NYSE: SLB) fell a steep 19% in February, according to data from S&P Global Market Intelligence, far more than the roughly 8% decline seen in the S&P 500 Index. But that's just one month -- between January and February Schlumberger has lost nearly a third of its value. There's a clear connection to COVID-19 here, but it's really something of a second-order effect.
Schlumberger is one of the world's largest providers of services to the global energy industry. When oil prices are low, demand usually falls for the drilling services that the company provides. When news of the coronavirus in China started to pick up in January, oil markets quickly became concerned that the country's demand for energy would fall. As China is one of the world's largest demand centers, this is a pretty big deal, and oil and natural gas prices started to decline. That directly impacts oil drillers' top and bottom lines.
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Source Fool.com
