Energy Stocks Benefit from Iraq Crisis

The chaos in Iraq is understandably distressing many, but in a weird twist, investors who own energy stocks are benefiting from the unfortunate situation.
In fact, violence in the Middle East and Vladimir Putin’s use of withholding natural gas as an economic weapon against Ukraine are actually lifting the energy sector to record levels.

That’s for two reasons. The obvious one is that higher energy prices translate to larger revenue for producers.

But there’s a spillover impact: Rising geopolitical tensions make U.S.-focused exploration and production companies all that much more appealing.

“If you can say you don’t have any Middle East operations, you don’t have to worry about Russia and oh by the way, we’re growing our production double-digits — that’s a pretty attractive story for investors,” said Brain Youngberg, an analyst who covers energy companies at Edward Jones.

via CNN

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza