Many analysts look at upstream, which refers to the exploration and production of oil and gas expenditures, from previous quarters to estimate future industry trends. For example, a decline in upstream expenditures usually drops down to other areas such as transportation and marketing.
Some analysts believe that rather than analyzing energy companies, you should just predict the trend in energy prices. More analysis is needed for a wise investment than simply looking at price trends in oil. However, it is true that there is a strong correlation between the performance of energy companies and the commodity price for energy.
The industry trend for the past five years has been that the upstream capital spending by oil and natural gas producers are the fundamental element for the revenue base of the equipment and oilfield services. Companies give significant amounts of money each year for exploration and development activities.
Analysts have been working carefully watching out the industry trends to see what type of investments can be made into the industry.
The Oil Services Industry
http://www.investopedia.com/features/industryhandbook/oil_services.asp
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