With the U.S. striking black gold in shale beds, major investors are throwing money at the growing U.S. energy sector. Retail investors can also capitalize on the shale oil boom through energy-sector related exchange traded funds.
“International trading companies have been buying assets all along, just not so much in America,” JP Fjeld-Hansen, managing director of Musket Corp., said in a Bloomberg article. “Now we’ve had this renaissance of U.S. energy markets and they’re bringing their capital here.”
Commodity traders are purchasing or building more physical assets in an attempt to get a piece of the oil shale pie and to profit on arbitrage opportunities between regions.
“You’ve got a situation in the U.S. with increasing production, which we expect to continue to increase, so significantly new streams, new places to go with those streams, those streams do need to be moved, and therefore a growing business,” Ian Taylor, Vitol’s chief executive officer, said in the article.
Skip York, vice president of Wood Mackenzie Ltd., points out that merchants haven’t been this active in the U.S. energy sector since the early years of the last decade.