Crisis Creating Big Opportunity for these Oil Trades

Chaos in the Middle East could send oil prices gushing higher.

Not only is Israel intensifying its fight against Hamas, Iran is threatening to join the fight. Even the U.S. just sent over another carrier. There’s also fear that if Iran does get involved, the Strait of Hormuz could be choked off, and send oil even higher.

In fact, as noted by Maritime-Executive.com, “As suspicion grows of Iranian involvement in the planning of the terrorist attacks in Israel last weekend, analysts are turning their attention to the potential for the conflict to spread to the Persian Gulf and the Strait of Hormuz, the world’s most important tanker transit chokepoint.”

With that fear, investors may want to consider jumping into oil stocks and ETFs, including:

SPDR Energy Select Sector ETF (XLE)

With an expense ratio of 0.10%, the XLE ETF provides exposure to companies in the oil, gas, and consumable fuel, energy equipment, and services industries, as noted by State Street SPDR. Not only does an ETF allow for diversification, you can buy it for less.

Exxon Mobil (XOM)

Analysts have been raising their price targets on XOM. TD Cowen, for example, raised its target to $110 from $107. Bank of America raised its target to $150 from $145. We also have to consider that a potential war with Iran could send XOM and oil prices even higher.

Plus, after dropping from $120 to $105 support, the XOM stock is just starting to push higher. From a current price of $109.87, we’d like to see the stock challenge $120 again shortly.

Chevron (CVX)

Much like XOM, we’d use the recent weakness in CVX as an opportunity to buy. From its current price of $164.06, we’d like to see CVX challenge $172 again shortly. Bank of America recently raised its price target on CVX to $190 from $185, as well.