Oil services giant Schlumberger annouced Q2 earnings on Friday that exceeded analyst expectations and saw the stock price jump nearly 4% on the day.

IEZSecond quarter revenue climbed 20 percent to $6.75 billion, led by gains in Latin America, Africa and Europe.  Q2 earnings were up 13% as customers continued to boost exploration and production spending on the basis of strong oil prices.

The share prices of oil services companies had pulled back over the past few weeks (see chart below) as profit taking, uncertainty over the future of oil demand and the potential impact of inflation on margins all took a toll.

However, Schlumberger’s presented a positive outlook for future customer spending on Friday with very strong growth expected in Latin America and potential new spending in North America with the loosening of restrictions on offshore drilling.  Schlumberger’s momentum should carry through to the rest of the oil services industry and to Oil and Gas Services ETFs.

The Dow Jones U.S. Oil Equipment & Services Index Fund (IEZ) owns companies that are suppliers of equipment or services to oil fields and offshore platforms, such as drilling, exploration, engineering, logistics, seismic information services and platform construction.

The SPDR S&P Oil & Gas Equipment & Services ETF (XES) tracks an equal weighted index of Oil & Gas Equipment & Services companies.

For more, see Investing in Oil and Gas Services with ETFs in the Themes Guide.