Even though legislation to approve the Keystone Pipeline failed to break the filibuster in the United States Senate, it was still a victory for Big Oil stocks like Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM), and Royal Dutch Shell (RDS-A).
The narrow defeats shows that there is a more sympathetic Senate on the way for energy interests, especially Big Oil.
There was only one more vote needed to beat the filibuster on the Keystone Pipeline, which will bring oil from Canada to ports on the Gulf of Mexico to be exported. It is likely there will be many more votes in favor of the Keystone Pipeline coming in January, when the new Congress convenes. The United States House of Representatives passed the legislation to approve the Keystone Pipeline, which then went to the Senate.
There should be a different end result in 2015 for legislation to build the Keystone Pipeline.
That would be very good news for Royal Dutch Shell, Chevron, ExxonMobil, and others in the oil and natural gas industry. While the long term future for oil and natural gas is bullish, the short term performance for many of the stocks has been bearish.
Chevron and ExxonMobil, however, have done well as each still has upstream and downstream operations (chart below).
This protects against a downturn in business for the other operations. But many other oil companies have sold off assets. That is hurting right now due to a drop in the price of oil. The long term prospects, however, are positive for the oil and natural gas industry.
Building the Keystone Pipeline will do much to enhance those prospects.
It will further development the North American oil and natural gas sector. That is needed; as other areas around the world are very unstable. Over the long term, that will reward investors in Big Oil stocks such as Royal Dutch Shell, Chevron, and ExxonMobil.