With the price of oil once again pushing the $90 per barrel level it makes perfect sense for the oil service stocks to join it in the rally. A higher price of oil means a larger profit for the oil exploration and production companies, which in turn will result in more money being spent on servicing rigs and equipment. The oil service stocks will be ready to accept all money that's thrown their way.

IN PICTURES: 7 Tools Of The Trade

Oil Equipment and Services
Dril-Quip (NYSE:DRQ) concentrates on equipment and services that are used by the deepwater drilling companies that are located offshore. Their products are used to explore for oil and gas on offshore oil rigs. The company trades with a forward P/E ratio of 24.3 after a big rally over the last six months saw the stock nearly double in price. In early December DRQ hit a new all-time high even as the offshore drilling situation in the Gulf of Mexico remained up in the air. DRQ is one of the strongest stocks in the sector.

Cameron International (NYSE:CAM) provides flow equipment products and systems to the oil and gas industries around the globe. The company is split into three segments: drilling and production systems, valves and measurement, and compression systems. The stock trades with a forward P/E ratio of 18.5 and is trading just below the all-time high set in 2008. A possible risk to watch is the fact that CAM provided the well equipment for the Deepwater Horizon rig that sank in the Gulf of Mexico last year. So far the U.S. government has not named CAM in its lawsuit against BP (NYSE:BP) and some of its partners.

Offshore Energy
(Nasdaq:ACGY) is another offshore energy service company that is based in the U.K. and concentrates on seabed-to-surface engineering. The stock trades at a forward P/E ratio of 21.5 and is sitting at the best level in over two years after nearly doubling from its June 2010 low. The fact that ACGY is an international stock that will have less exposure to the U.S. offshore market is a positive due to the political issues regarding drilling in the country.

Technology and Laboratories
FMC Technologies
(NYSE:FTI) provides technology solutions to the energy sector in 15 countries worldwide. It designs and services technologically sophisticated products such as wellheads and fluid control equipment used by oil and gas companies. The stock is a bit expensive with a forward P/E ratio of 26.4; this is due to the big rally to a new all-time above $90 it touched in mid-December. FTI is one of my favorites in the sector, but it must pull back to the $80 before it will be considered a buying opportunity.

Core Laboratories (NYSE:CLB) is a Netherlands-based company that is the leading provider of reservoir management services in the oil and gas industry. Its proprietary technology allows its clients to maximize the recovery of hydrocarbons from the wells. CLB is another stock that is at a new all-time high as companies turn to them to get the most of our their current wells. A forward P/E ratio of 25.7 makes the stock expensive at current levels, but a pullback can change that quickly.

Do Not Chase
Many of the stocks mentioned in this article are at or near all-time highs. I do feel there is more upside to the entire sector, however when considering buying the key is to buy on weakness and not when a stock is at a new high. (Changes in the price of oil aren't arbitrary. Read on to find out what moves them and why. Check out What Determines Oil Prices?)

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