I’ve been neck deep into the energy sector lately.And one area of the oil patch has caught my attention.These aren’t the flashy stocks you hear about on CNBC.But they’re the companies doing the heavy lifting in the energy world.These companies have drilling expertise… the specialized equipment… and the technical know-how that makes oil production possible.And they are some of the names best positioned to push higher under the new Trump administration.Here’s why…
Why I’m Excited About Oil Service Companies Right Now
The energy landscape has shifted dramatically in recent years. We’ve seen restricted leasing on Federal lands, limited exploration in Alaska and coastal regions… and tight controls on Gulf of Mexico drilling. And owning energy stocks has been difficult for investors.But that’s all about to change…Like him or not, Donald Trump was elected president.And the new administration aims to streamline regulations and speed up permitting. That means more American oil coming out of the ground and hitting the global market.Oil service companies are set to soar in this environment.If you’re unfamiliar, oil servicers make their living helping producers like Exxon Mobil get oil out of the ground.The beautiful thing about service companies is that they’re the “pick-and-shovel” plays of the energy world. They make money whether their customers strike it rich or not, as long as drilling activity stays high.Aside from deregulation, there’s also the international angle to consider with energy policy.The President-elect has already said he’s going to be tough on Middle Eastern oil nations.A tougher stance on Iran and certain OPEC members would constrict global oil supply. And the crude crunch would drive more demand for domestic production. When US producers need to ramp up drilling fast, guess who they call first? That’s right, the service companies.But here’s what really gets me excited…The Strategic Petroleum Reserve needs a major replenishment. We’re talking about 300 million barrels of oil. That’s not a one-time boost; that’s sustained demand that could keep these service companies busy for years to come.In other words, these three key drivers have created the perfect platform for oil servicers to skyrocket.
Three Profitable Players – And How to Trade Them
Now you know why I like oil service companies right now.Let me share three companies that are at the top of my watchlist:
I’m watching these names like a hawk for technical breakouts. When I spot the right setup, I typically use options to maximize my potential returns while keeping my risk in check. These situations can create some of the best risk-reward opportunities I see in the market. Especially when stocks break out of long-term trading ranges.Remember, though – while I’m genuinely excited about this sector, always do your homework and know your risk tolerance. These stocks can move fast in both directions, so position sizing is crucial. But if you’re looking for a way to play the coming shifts in energy policy, take a look at oil services companies now.More By This Author:
