According to the latest report from the U.S. Energy Information Administration, retail gasoline prices rose last week for the eighth straight week. The report said that the average price for a gallon of gas increased six-tenths of a cent to $3.11 a gallon, 41 cents higher than last year at this time.
Those elevated prices could persist, as we’ve seen a big spike in crude oil prices due to the political upheaval in Egypt. Fear over an oil supply disruption caused by any restriction of maritime traffic through the Suez Canal has driven oil prices to a new 52-week high.
Yet as much as we all hate paying more at the pump, there is an easy way to get revenge — and that’s by owning energy stocks.
Over the past couple of weeks, we’ve seen stellar quarterly profit reports from Big Oil’s top players. The most recent blockbuster quarter came from Exxon Mobil (NYSE:XOM), with the company announcing Monday that it saw fourth-quarter profit jump 53% to $9.25 billion. Interestingly, the latest rise in the value of XOM shares has pushed its market capitalization north of $405 billion. By comparison, Apple’s (NASDAQ:AAPL) market capitalization is about $311 billion.
We’ve also recently seen strong earnings from once-troubled BP (NYSE:BP). That company said fourth-quarter profit rose 30%, and it even announced plans to pay a dividend of 42 cents a share. Other notable oil companies hitting their earnings stride of late are Baker Hughes (NYSE:BHI), Halliburton (NYSE:HAL) and Occidental Petroleum (NYSE:OXY).
If we look at the chart here of the Energy Select Sector SPDR (NYSE:XLE) — an exchange-traded fund containing the biggest oil companies — we see the tremendous gains in the share price of oil stocks over the past 12 months. XLE was up more than 30% in the past year. So, even if you owned just a small number of XLE shares, the gains you’ve made likely more than make up for the extra money you’ve spent at the gas pump.
While XLE is a great ETF for allowing investors broad exposure to the biggest energy stocks, it’s not the only oil and gas related fund demonstrating strength.
The SPDR S&P Oil & Gas Equipment & Services (NYSE:XES) is an ETF containing the aforementioned Baker Hughes, as well as recent standouts National Oilwell Varco (NYSE:NOV), Superior Energy Services (NYSE:SPN) and Helmerich & Payne (NYSE:HP). XES has surged over 40% in the past 12 months — again more than enough to offset that extra $20, $50 or even $100 a month you spend on gas.
While it might be fashionable to complain about the high cost of gasoline and crude oil, it’s not going to make you any money. For that you need to embrace the situation, and there is no better way to do so than via oil sector ETFs.
At the time of publication, Jim Woods held no positions in any of the stocks mentioned in this article.
