"Valuations for even the best-placed, most well-established companies in the energy space are sitting at levels unseen since the late 1990s when oil prices collapsed to around $10 per barrel," says energy sector specialist Elliott Gue.

Here, the editor of The Energy Strategist looks at Schlumberger (NYSE: SLB), noting, "The firm active in just about every imaginable market and I regard the company as a top-notch indicator of ongoing trends in the oil services business."

"It's clear that there's been some slowing in demand, and the credit crunch has had an impact on the fundamental business. But the reaction in the stock market over the past three months goes well beyond even a worst-case scenario.

"Bottom line: Many energy-related stocks are pricing in a severe recession and recent action in the broader markets is reminiscent of sentiment characteristically seen near market lows. The short-term outlook for the energy patch is much better now than it was during the bear market in 1998 and 2002.

"I regard Schlumberger as a top-notch indicator of ongoing trends in the oil services business and, more broadly, international oil and gas drilling activity. I always pay close attention to what Schlumberger has to say in its conference calls and, as usual, this quarter's call was instructive.

"One of my favorite indicators for the energy markets is the quarterly conference calls and earnings releases from Schlumberger (NYSE: SLB)," says energy sector expert Elliott Gue.

In his The Energy Strategist, he explains, "In this quarter's call, Schlumberger's management team was notably upbeat, the most positive on industry growth expectations in more than a year. This is a key shift in sentiment that has broader implications for the energy patch at large."

"Schlumberger's reports and conference calls have proved extraordinarily useful in the past for determining the most profitable trends and investment themes. The reason for that is simple: Schlumberger is the largest oilfield services company and has its hand in just about every imaginable market all over the world.

"In addition, the company has traditionally offered long, detailed conference calls; CEO Andrew Gould often relates far more than the outlook for Schlumberger and offers considerable color and detail concerning trends for the industry in general.

"This quarter's conference call was no exception. Schlumberger's outlook this quarter was far more upbeat than in its third and fourth quarter 2007 earnings calls.

If you don't yet own oil-services stocks, commodity and resource expert Eric Roseman says "You better. I'm expecting big returns for everything energy-related in 2007."

In his Commodity Trend Alert, he states, "Whatever you do, hang on to your energy investments. By the end of this year, you'll be lighting firecrackers on New Year's Eve. I'm that sure." Here, he looks at some of his favorites, which he consider "must own" oil service plays.

The advisor notes that corrections for the energy complex occur in every bull market, and that the most recent one is no different. However, he notes, "What's incredible is how bearish sentiment had become for oil since earlier this month; just six months ago, analysts and traders were forecasting $100 per barrel by spring. They then began to forecast $40!"

Roseman, however, has remained bullish through the correction and notes, "In addition to tight supplies, still at 86 million barrels of oil per day against 84.5 million barrels consumed."