PXJ: A Good Choice For An Oil And Gas Services Investment

Robert Boslego 5.76K Followers Follow Summary The Invesco Oil & Gas Services ETF is recommended as a timely long position due to acute oil supply disruptions and anticipated price spikes. PXJ has outperformed peers, delivering a 73% annual return versus XOP’s 53%, which is attributed to its sector allocations and index methodology. Current geopolitical risks, including Saudi pipeline attacks and Red Sea threats, have created a significant supply-demand deficit, supporting higher oil prices. Despite a higher expense ratio (0.63%), PXJ’s portfolio construction and exposure to oil services and processing sectors justify its selection for oil market upside. The drone threat to Saudi Aramco's oil infrastructure is a difficult problem and implies it can continue unimpeded. Leonid Eremeychuk/iStock via Getty Images The Invesco Oil & Gas Services ETF ( PXJ ) is an index fund that seeks to track the results of the Dynamic Oil Services Intellidex℠ Index (Index). The Index is composed of stocks of roughly 30 U.S. companies This article was written by Robert Boslego 5.76K Followers Follow Managing Director, Boslego Risk ServicesHarvard College, Economics (Honors), BA Undergraduate thesis: "OPEC Pricing Strategy." Harvard Business School Case Study: "Industrialized World and Oil."Stanford University Graduate School of Business, MBA I founded Boslego Risk Services and became a recognized expert in the area of energy price risk management (hedging) and trading, providing oil and natural gas hedging strategies to major oil companies such as Exxon, Shell, Mobil, Chevron, Texaco and Phillips; to the national oil companies of Norway, Venezuela, Mexico, Canada, France and Italy; to major users of energy products, such as Delta Airlines, United Airlines, Burlington-Northern Railroad, and Canadian Pacific Railway.I also provided frequent market assessments and recommended trading positions to major trading firms, such as Enron, Phibro, Sempra and Vitol, and to large hedge funds.As the recognized expert in energy hedging, I was selected by the former president, John Treat, of the New York Mercantile Exchange (NYMEX) to write the chapter on hedging in his book, Energy Futures (1990, 2000). Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in PXJ over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.