It hasn’t been a good year for energy stocks — the only sector left out of November’s stock market rally. And its outlook for 2024 looks similarly underwhelming: the International Energy Agency expects the slowdown to continue next year. But one portfolio specialist is bullish on the sector’s long-term prospects. “We’ve been more constructive on energy than we were in the last year,” Rahul Ghosh, equity portfolio specialist at investment firm T. Rowe Price, told CNBC Pro on Nov. 29. He was speaking before major shipping lines and oil transporters suspended travel through the Red Sea after a spike in attacks by Yemen’s Houthi rebels, pushing oil prices higher . In a follow-up chat on Monday — after major shipping lines and oil transporters suspended travel through the Red Sea, pushing oil prices higher — he said he remains optimistic on the sector. “Our view is that we’re in an environment where the upside to extra oil supply over the medium term is capped. So, if nothing else happens and the conflict in Middle East does not expand — we think that energy can be a portfolio hedge as well as a fundamental going forward,” Ghosh added Against that backdrop, Ghosh is looking to play the theme with oil services names, rather than bigger oil companies. “It’s actually the oil services companies that do more work – like drilling more or doing more analysis on whether to get shale or deep water, offshore rigs — rather than the big oil companies like Exxon Mobil or BP . So, the ability of those guys to capture the value from slightly higher oil prices or more oil drilling activity is probably higher than the market probably has priced in,” he said, naming oilfield services giant SLB — previously known as Schlumberger — as one of the firms on his radar. “Schlumberger is trading on roughly mid-teens, price-to-earnings multiple — so it’s baking a lot of upside from what could happen,” Ghosh said. SLB YTD mountain Year-to-date shares in Schlumberger. The company offers a range of services to the petroleum industry, such as well testing and directional drilling, software and information management, and seismic data processing. Data from Eikon shows it is trading at 14.64 times its 12-month forward price-to-earnings ratio. This compares to an average of 10.33 times trailing price-to-earnings for the S & P 500 Energy sector as a whole, indicating a healthy valuation. Shares in SLB slid on Friday after a two-day winning streak. Year-to-date the stock was trading up 1.5% at $52.28 on Dec. 18. Of the 28 analysts covering the stock, 27 give it a buy or overweight rating with an average price target of $69.68, according to FactSet, giving it upside potential of around 33.5%.