These Energy Stocks Will Soar in a Global Storm

Andy Snyder|February 23, 2022

The storm continues.

Snap… prices surge higher.

Boom… the economy shakes loose.

Roar… the devastating power screams through the landscape.

But this isn’t just any ol’ thunderstorm. The air is thick. The winds are spinning. And the clouds are turning green.

Mr. Market is a beast. But ego-driven despots (whether at home or abroad) can do far crazier things – for the market is driven by rational choices, but the politician is driven by a perverted lust for power.

It’s spun into quite a mess for the average investor.

But there is hope. We’ve detailed some of best ports in the storm in recent days. They’re the places to hide while the winds rip and the thunder claps.

What about the fella who wants to be aggressive… the investor who’s eager to don his slicker and lean into the hail and the gusts?

For him, we have just one word.

Oil.

Another Big Comeback

As tensions in Europe boil, the world is about to lose one of the greatest sources of fuel on the planet. Without Russia, the system doesn’t work.

We’ve already seen the start of its deterioration. Energy was one of the hottest sectors last year. That trend has accelerated in the turmoil of 2022.

But just a small subset of the energy market will treat investors best.

The majors will do just fine… They always do. But it’s the small drillers – the boys that got so much attention just a few years ago – that will open their spigots to big profits over the next few months.

This is a high-stakes game. The variables are many, and the risk is high.

The situation in Russia could end just as quickly as it started. The big boys could flood the market. The little guys may not move fast enough.

But with risk comes reward.

Fracking-focused drillers that can read the situation correctly and scale up quickly could see wild share price gains over the next few months.

Mapping It Out

The areas to watch are the Permian and Anadarko basins.

The Permian is the safer of the two. Its margins are better, and work there was expanding prior to the latest shakeup. Companies working there have less risk… but also less reward.

Oklahoma’s Anadarko is at the margins of it all. There’s oil there… lots of it.

But it takes money and time to move crews in. With crude prices plunging over the last 24 months, most companies put a cap on their wells and moved on.

It was either that or close up shop.

But now that demand is rising and prices are surging, the numbers make sense once again. The rust is being scraped off the equipment, and fast-moving drillers are moving in.

Chesapeake Energy (CHK) has some exposure to the region. So do Continental Resources (CLR) and Devon Energy (DVN).

The firms that move the fastest – getting into the oil while tensions are high and out of it when tensions calm – will do the best.

But here’s a word of warning. This is not the all-clear for the oil industry. We won’t see the boom come back to North Dakota anytime soon. Pennsylvania’s Marcellus formation won’t be turning farmers into millionaires overnight once again.

This is a play in the margins.

The companies that can get out of their comfort zones while prices are high will do very well.

It’s a strong short-term trade in an industry in a long-term transition.

Somebody is going to make a lot of money as this storm blows through.

Put on your raincoat and tighten your hat.