New Trump Transparency Rule Is a Boost for Oil Stocks in 2017

trump transparency ruleOn Tuesday (Feb. 14), President Trump signed his third bill into law, eliminating a Dodd-Frank regulation requiring resource-extracting companies to disclose payments to foreign governments.

This new "Trump transparency rule" basically means oil companies don't have to report any of their payments to other governments any longer. And while many oppose the Trump transparency rule, we view this as a bullish catalyst for oil stocks in 2017.

The rule comes from the Congressional Review Act, which allows Congress to overturn recently made rules by the executive branch. The Obama administration finalized the disclosure rule for oil companies in June 2016.

"It's a big deal," President Trump said as he signed the law.

We think so, too, especially for oil stocks. Before we get into what this means for oil stocks and your investments, here's a closer look at the Trump transparency rule...

What the Trump Transparency Rule Means

The Dodd-Frank law passed in 2010 contained a provision directing the Securities and Exchange Commission to issue new rules. Specifically, the SEC was directed to create a rule requiring oil, gas, and mineral companies to publicly disclose any payments made to foreign governments.

The SEC finally created that disclosure rule last year.

According to the SEC, the oil company transparency rule was designed to fight corruption in resource-rich countries, where governments accept bribes from corporations before allowing access to their natural resources.

The Dodd-Frank rule was meant to weaken this "resource curse."

Trending: There Are Big Changes and Big Profits Coming to the Oil Sector in 2017

But critics argued the financial disclosure rule made American oil and gas companies less competitive. The lobbying organizations for the oil and gas industry were vocal about their disagreements.

"The SEC's rule forces U.S. companies to disclose propriety information to competitors while foreign entities do not," said Stephen Comstock, the director of tax policy for the American Petroleum Institute, during a June interview.

That means an oil giant like Saudi Aramco wouldn't be required to disclose any foreign payments, while American oil companies would.

By getting rid of the rule, American oil companies won't have to disclose these payments any longer.

But here at Money Morning, we're more interested in what Trump's transparency rule means for your investments.

And we think this rule signals a major profit opportunity for you...

How to Profit from President Trump's Energy Policies

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You see, President Trump campaigned on a platform to ease regulations on American energy companies, and that's great news for oil stocks in 2017.

Oil companies struggled last year when crude oil prices hit a 10-year low of $35.59 in January. Since then, oil prices have surged 50% to $53.19.

Higher oil prices have been a big boost to American oil companies. U.S. oil production is up 7% from its lowest point in 2016, and that's pushed the iShares Dow Jones U.S. Oil & Gas ETF up 17% during that same time. But President Trump's oil-friendly policies are going to make oil companies even more profitable in 2017.

President Trump campaigned on a policy of making "America energy independent," which he said would come about through slashing regulations on the oil industry.

And so far he's been following through on that in a big way.

Last month, President Trump signed an executive order allowing the construction of the Keystone XL and Dakota Access oil pipelines. He's also filled his administration with oil-friendly appointments.

For example, President Trump has nominated Scott Pruitt to run the EPA. Pruitt is known for suing the EPA over regulations that hurt the oil industry when he was Oklahoma's attorney general. Former Exxon Mobil Corp. (NYSE: XOM) CEO Rex Tillerson is now the secretary of state.

And now one of the very first pieces of legislation President Trump signed ends a financial regulation that hurt the oil industry.

Now that oil prices are back on the rise and President Trump is cutting regulations on the industry, oil stocks could be big profit plays this year.

To help investors find which oil stocks to play, we've put together a list of top oil stocks to buy. Read our best oil stocks to buy in 2017 right here...

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