Exxon Mobil (NYSE: XOM), the largest U.S. oil company and XLE’s largest holding at a weight of 16.2%, has also been highlighted as a potential Keystone winner.
The SPDR Oil & Gas Equipment & Services ETF (NYSEArca: XES), the equal-weight alternative among oil services ETFs, could also benefit as Keystone would likely lead to increased spending on oil services.
Not only are oil services stock currently discounted on valuation after the recent glum price action in the group, XES is home to several companies that have been previously mentioned as takeover targets, including, Weatherford (NYSE: WFT), Tidewater (NYSE: TDW), Dril-Quip (NYSE: DRQ) and McDermott International (NYSE: MDR). [Oil Services ETFs Could be Bargains]
“The completion of XL would be broadly positive for energy companies and energy-rich states. XL has Republican support, but it may face a Presidential veto if overall Congressional support is tepid. As a result, if Republicans win both houses of Congress, XL’s path to completion becomes easier and much more likely. There could also be an undercurrent of Democratic support in energy-producing states, which could facilitate overturning a Presidential veto if necessary,” adds Mazza.
SPDR Oil & Gas Equipment & Services ETF
