Tuesday, June 8, 2010

Noble (NYSE:NE) Among Goldman (NYSE:GS) Oil Industry Downgrades

Goldman Sachs (NYSE:GS) took out their downgrade scalpel today and did some surgery on the oil industry, including the downgrading of Noble (NYSE:NE) from "Buy" to "Neutral."

All the cuts by Goldman were centered around expectations the moratorium on drilling for oil in the Gulf of Mexico will be extended to 12 months, as the political will to resist the extension won't exist in an election year.

Other analysts are looking at the possibility the moratorium won't be extended, but the fact that delays are already part of the picture means everything is pushed out as to what the performance of Noble and other offshore drillers would have been.

Either way, Noble and others will continue to remain under pressure, and the uncertainty of the direction Obama and other politicians will take on the moratorium will continue to hang over the industry until a decision is made.

No comments: