In a new report, Citi Research analyst Scott Gruber discusses why the firm finally believes it’s time to buy U.S. oil services stocks. Citi has upgraded the oil services sector to Buy and named its top stock picks in the space.

Crude Prices Too Low To Drive Production Growth

With WTI price currently sitting below $40/bbl, Citi believes that the current price environment will likely lead to negative U.S. production growth in 2016 and 2017. If WTI remains at its current level, Citi forecasts U.S. production declines of 600 kbpd in 2016 and 1.0 mmbpd in 2017.

In addition, the firm is confident in a long-term recovery once the current oil glut is eliminated because OPEC appears unable to meet global demand growth on its own beyond 2016.

Getting In Early

According to Gruber, Citi is deliberately getting…

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