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BOSTON ( TheStreet) -- Turmoil in the international oil market is a boon for North American energy.
That's particularly true for companies that own oil-shale and oil-sands properties, and those that provide oil-field services used in exploration and production.
Shares of companies in the oil and gas drilling industry have jumped 23% this year, the third-best sector performance of 148 tracked by Morningstar. Oil and gas equipment services is up 11%, ranking 18th. The
S&P 500 Index has risen 4.4%.
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Big inflows into the sector are due to bets that homegrown oil will replace some foreign oil sources as international prices top 2 1/2-year highs. The escalation of political turmoil in Libya, which has about 2% of the world's known oil resources, has propelled the cost of crude.
Oil and natural gas resources in North America are huge, but extraction is expensive since it has to be removed using high-pressure blasting of water and chemicals from rock and sand formations. In contrast, oil in much of the Middle East is extracted by traditional drill-down methods.
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So there is new investor interest in exploration firms, oil-rig suppliers, drilling contractors and companies that provide material and technologies used in freeing oil and gas from North American deposits, as well as companies that have bought up drilling rights to properties with those deposits.
Indicative of the frenzied interest in North America's oil-shale deposits,
PetroChina(PTR) paid $5.4 billion to buy a Canadian project from
EnCana(ECA) last month, while
ExxonMobil(XOM), already the largest U.S. natural gas producer, said in January that it's on the prowl for new properties.
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five companies in various parts of the industry to consider as investments: