Oil Service ETFs Take A Hit On Gulf Spill Disaster (OIH, XES)
“The oil spill off Louisiana in the Gulf of Mexico requires unprecendented measures to contain it. It likely to reduce future offshore drilling, lower supply and raise prices for oil. As the easy to get to oil on land has become scarcer, the industry has increasingly been forced to develop offshore wells in deeper and deeper water. This strategy is not without its risks, as the recent explosion of the Deepwater Horizon drill rig off Louisiana last week made evident. The event is rapidly turning in to one of the worst environmental disasters of all time and may surpass the Exxon Valdez spill in Alaska. New offshore production is likely to be halted for some time and consequently long-term projections for oil production should be lowered,” Daryl Montgomery Reports From ETF Guide.
Montgomery goes on to report, “The Gulf of Mexico is a prime source of offshore oil and gas production, but it is by no means the only one in the world. Major offshore production also exists in the North Sea and even the Middle East. New discoveries off the west coast of Africa and the waters off Brazil have gotten the media’s attention as the great hope for oil production in the future. When I first read the hype about the large deep-water deposits east of Brazil (which are also under a lot of earth as well as water), I noted a brief comment that stated the technology doesn’t currently exist to tap these deposits. The recent disaster off Louisiana demonstrates that the technology also doesn’t exist to fix a blow out or spill from currently existing offshore wells. The description of the size of the oil spill varies considerably from one report to another. At first, it was just a few thousand barrels a day, then some sources stated 42,000 gallons a day are leaking, while higher estimates have now reached 210,000. There is a device called a blowout preventer that was supposed to have kept the explosion and leak from happening, but it failed.”
“Needless to say, oil service stocks have taken a hit because of the Louisiana disaster. ETF (AMEX:OIH) has declined more than ETF (NYSE:XES) though. British Petroleum (NYSE:BP) has been down as much as 13% so far. Anadarko (APC) also has a 25% stake in the well and Mitsui a 10% stake. President Obama has declared that they are fully responsible for all clean up costs. The first class action suit relating to the spill has already been filed and claims for damages to fishing and related industries could be enormous. Trans Ocean Ltd (NYSE:RIG) owned the rig and its stock has dropped 21% so far, Halliburton (NYSE:HAL) was in charge of the drilling and Cameron International (NYSE:CAM) supplied the failed blowout preventer,” Montgomery Reports.
See The Full Story: HERE
We have put together some details on the Oil Services HOLDRs ETF (AMEX:OIH) and the SPDR S&P Oil & Gas Equipment & Services ETF (NYSE:XES) including the top companies within the ETFs below:
Oil Services HOLDRs ETF (AMEX:OIH)
The investment seeks to diversify your investments in the oil service industry through a single, exchange-listed instrument representing your undivided beneficial ownership of the underlying securities. The investment holds shares of common stock issued by specified companies that, when initially selected, were involved in the oil service industry. Except when a reconstitution event, distribution of securities by an underlying issuer or other event occurs, the group of companies will not change. There are currently 18 companies included in the investment.
| TOP 10 HOLDINGS ( 83.40% OF TOTAL ASSETS) |
|
SPDR S&P Oil & Gas Equipment & Services ETF (NYSE:XES)
The SPDR® S&P® Oil & Gas Equipment & Services ETF seeks to replicate as closely as possible, before expenses, the total return performance of the S&P Oil & Gas Equipment & Services Select Industry® Index (ticker:SPSIOSTR). Our approach is designed to produce portfolios with low portfolio turnover, accurate tracking, and lower costs.
| As of04/30/2010 | |||
| Name | Weight | Total Mkt Cap M | Shares Held |
| Superior Energy Svcs Inc | 5.02% | $ 2,125.59 | 664,108 |
| Exterran Hldgs Inc | 4.55% | $ 1,838.75 | 558,622 |
| Dresser-Rand Group Inc | 4.52% | $ 2,911.69 | 458,301 |
| Schlumberger Ltd | 4.48% | $ 85,190.41 | 224,451 |
| Tidewater Inc | 4.47% | $ 2,772.55 | 297,944 |
| Smith Intl Inc | 4.44% | $ 11,868.74 | 332,324 |
| Fmc Technologies Inc | 4.41% | $ 8,248.70 | 232,950 |
| Rowan Cos Inc | 4.38% | $ 3,392.28 | 526,278 |
| Oil Sts Intl Inc | 4.30% | $ 2,417.05 | 318,069 |
| Seacor Holdings Inc | 4.24% | $ 1,898.37 | 180,310 |
Related posts:
- Middle East: The Gulf States’ Credit Markets Are Rebounding (BNO, MES, GULF)
- Four ETFs That Have Held Their Ground During Crisis (EWL, VGK, EZU, GULF, EGPT, HYLD, LSC)
- Twelve (12) Giant U.S. Banks Vulnerable To Disaster (XLF, FAS, FAZ, BAC, JPM, WFC)
- Will The Gulf States Drop The Dollar Peg? (PGD, UUP, UDN)
Most Comments