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If the IEA Is Right, These ETFs Are Good Long-Term Bets

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The International Energy Agency said the US will surpass Saudi Arabia as the world's largest crude producer by 2020.

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"The recent rebound in US oil and gas production ... is spurring economic activity ... and steadily changing the role of North America in global energy trade," IEA said in its World Energy Outlook released over the weekend.

Assuming the IEA is correct in its prediction that crude will rise to $125 per barrel by 2035, this could be very good news indeed for the US economy. It should also prove to be excellent news for the following news going forward.

Market Vectors Unconventional Oil & Gas ETF (NYSEARCA:FRAK): All of sudden, the Market Vectors Unconventional Oil & Gas ETF becomes more than just a new ETF with a cute ticker. FRAK, which debuted in February, has thus far struggled to attract to assets with less than $18 million heading into the start of trading today. To some extent, FRAK's struggles on the asset front are understandable. There are plenty of large-cap heavy equity-based oil ETFs on the market so standing out can be difficult.

However, that is exactly what FRAK has the potential to do assuming the US really does become the world's king of oil output. All of FRAK's constituents have some exposure to North American shale or oil sands production. One big reason to like FRAK: If an investor cannot own shares of EOG Resources (NYSE:EOG) directly, FRAK is the ETF with largest weight to the stock at over 7%.

EOG is the dominant producer in the Eagle Ford Shale, a primary reason why US oil production is surging. Texas-based EOG has consistently raised its Eagle Ford reserve estimates to the point where it is reasonable to expect this well-run company will expand its leadership role among US oil and gas independents.

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No positions in stocks mentioned.

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