Nov 18 (Reuters) - Barclays Capital cut its price target on thirty oil service and drilling companies, as it believes the outlook for worldwide exploration and production spending, and oil service company earnings continues to deteriorate.
The brokerage also cut its forecast for 2009 average oil and U.S. natural gas prices to $60 per barrel from $70 per barrel, and $6.50 per million cubic feet (mcf) from $7 mcf, respectively.
"We believe there is considerably more bad news to come in the sector in the form of rig count reductions and earnings deterioration," the brokerage said in a note to clients.
Barclays expects flat exploration and production spending worldwide in 2009, with a 29 percent drop in North America.
The brokerage also forecast a fall in U.S. rig count to 1,500 or less by May next year, citing lower natural gas and oil prices and lack of availability of outside funding. Currently, there are about 2,000 rigs in the United States.
Among large oil service companies under Barclays' coverage, the top picks were Weatherford International Ltd (WFT.N), National Oilwell Varco (NOV.N), Cameron International Corp CAM.N and Baker Hughes Inc BHI.N.
For the price target changes, please double-click [ID:nWNAB4782] (Reporting by Arup Roychoudhury in Bangalore; Editing by Pratish Narayanan)