Oil Stocks Attractive After Hurricane Irene (XES, RES, SPN, BPL)
Ian Wyatt: A number of oil stocks are worth putting on your radar screen in the aftermath of Hurricane Irene which barreled up the East Coast over the weekend.
The oil industry began shutting down certain refineries and storage facilities as it hunkered down for what was likely the worst storm to hit the region in the last century.
For investors, the work to uncover the oil stocks that will rise in price as a result of the storm began last Friday. It’s time to review how a potential oil stock portfolio might benefit from any post-Irene repair work needed; and try to guess as to whether or not oil spot prices will rise as a result of the potential impact on America’s oil infrastructure.
The price of oil is largely determined by supply and demand fundamentals, and oil refineries along the east coast are part of this equation. The Department of Energy breaks down the U.S. into five ‘Petroleum Districts’, and PADD 1, covering the East Coast, is by far the smallest with just 14 refineries.
Oil Stocks with Operations in the East Coast’s PADD 1 District are in Irene’s Path
PADD 1 pumps oil out through oil terminals and pipelines that the petroleum industry supplies to one of the most densely populated parts of the country. The hurricane could impact a big oil terminal in New York harbor, where the major 5,500-mile Colonial pipeline delivers oil from the Gulf Coast.
While oil’s price per barrel has fallen back into the low $80s this summer, retail fuel prices are again surging in many areas of the country. A lengthy oil disruption is likely to lead to higher prices at the pump for consumers east of the Mississippi.
Oil Stocks to Put on Your Radar Screen
For oil stock investors looking for companies that are going to come in and handle any repairs, check out the following:
- The SPDR S&P Oil & Gas Equipment & Services Exchange Traded Fund (NYSE:XES). This fund is loaded with oil stocks and is a good selection by itself. But also check out oil stocks within this ETF. The next two oil stocks are in the XES.
- One oil stock in the XES is RPC (NYSE:RES), a dividend-paying oil stock that provides oilfield services and equipment support.
- Another possibility is Superior Energy Services (NYSE:SPN), also a specialist in oilfield services. This oil stock has a market cap of $2.6 billion.
- Beyond this ETF, one individual oil stock to consider is Buckeye Partners L.P. (NYSE:BPL) which operates 5,400 miles of pipeline and 69 terminals. It pays a 6.7 percent dividend and has a market cap of $5.7 billion.
These four oil stocks represent ways that investors can soften the blow of an increase in oil’s price from Hurricane Irene’s adventure up the east coast this weekend.
Wyatt Investment Research is led by founder Ian Wyatt, who serves as Publisher and Chief Investment Strategist. Our team also includes a group of talented research analysts and editors who aim to uncover great investments and present those investment ideas to our growing group of loyal subscribers.Ian Wyatt is an active investor, a well-regarded investment expert and an Internet entrepreneur. He is the Chief Investment Strategist at Wyatt Investment Research, and plays a leading role in each of the company’s investment newsletters and trading services. As a well-regarded market expert, Ian has written for Marketwatch, Zacks Investment Research, Seeking Alpha, Yahoo! Finance and The Burlington Free Press. He has been interviewed or quoted in articles in well-known publications including AOL Finance Blogging Stocks, Kiplinger’s Personal Finance Magazine, Barron Magazine, Barrons.com, Forbes.com, The Dick Davis Digest, The Dick Davis Income Digest, The Wall Street Transcript, TheStockAdvisors.com, Money Show Digest, The New Jersey Star Ledger, The Wisconsin State Journal and The Seattle Times.