3 American Companies Saying 'Thank You!' To OPEC
By Zach Scheidt | May 21, 2018 |

We’ve talked a lot recently about how oil prices are now above $70/barrel in the United States.


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That’s up over 150% from the lows back in early 2016.

The cause of this uptick has been a “perfect storm” type scenario for oil investors. The supply of oil is low due in most part to OPEC’s policy restricting production, while the demand for oil is still extremely high, due in most part to the booming world economy that now relies on more oil to continue churning.

But this is only half of the oil story (not even!). Which is why today I want to complete the picture and give you three stocks that should benefit most from the new trend I’m seeing in today’s oil market…

Up until this point I’ve only talked about oil prices in the U.S., but have you noticed how oil prices abroad are looking?

They are even higher!

Brent crude, which serves as a major benchmark for global oil prices, is now above $78/barrel.

That’s the widest spread between U.S. oil (measured by WTI crude) and Brent crude that we’ve seen since U.S. lawmakers permitted the export of U.S. crude in 2015.

This divergence shows just how stretched global oil prices really are!

Even with U.S. drillers producing a record 10.7 million barrels/day, we still can’t produce enough to change the supply and demand fundamentals in the global oil market. And that great news for U.S. pipeline companies!

Let me explain…

The difference between U.S. and global oil prices is a key factor in determining whether it is worthwhile to ship oil abroad or sell it domestically. A wider price spread makes longer, more costly journeys to markets abroad more profitable.

And with the current spread being the largest in three years, oil producers cannot get their product to the coasts fast enough!

According to The Wall Street Journal, oil is already backing up in West Texas where there aren’t enough pipelines to get all the oil to market.1

That’s great news for pipeline companies like Kinder Morgan (KMI), Energy Transfer Partners (ETP) and The Williams Companies (WMB), whose pipelines will be working around the clock (and charging higher prices) to meet the growing demand.

And the best part, these companies currently pay great dividends to income investors like us that should only grow as profits increase.

Kinder Morgan (KMI) Dividend — 5.00%

Energy Transfer Partners (ETP) Dividend — 12.00%

The Williams Companies (WMB) Dividend — 5.32%

The “Great American Oil Boom” is underway and these companies are great “pickaxe and shovel” investments to take advantage of this emerging trend.

This article originally appeared on The Daily Reckoning.

 

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