Koesterich Likes Global Oil Names (IXC, FILL, BP)

Not to beat a dead horse, but oil futures, futures and their corresponding ETFs have seen better days. With enthusiasm for the Spanish bank bailout all but evaporated, West Texas Intermediate is again trading below $84 per barrel and Brent crude, the global benchmark, is trading below $99 a barrel. That comes on top a brutal May that saw U.S. oil futures plunge 17%. Still, it pays to note that blood on the streets could be a sign to buy. Russ Koesterich, global chief investment strategist for iShares, remains bullish on the long-term prospects for oil. In a note

, Koesterich cites increased production from sources where output costs are higher and a lack of OPEC spare capacity as two catalysts that could lead to an oil rebound. To those two factors, Koesterich adds "Many of the largest oil producing countries – notably Saudi Arabia and Russia – now require a much higher price for crude in order to balance their budgets." Many investors will no doubt consider the energy sectors standard fare, be that shares of Exxon Mobil

and/or Chevron

, or ETFs such as the Energy Select Sector SPDR

or the Vanguard Energy ETF

. To be sure, there are some compelling valuations to be had with domestic oil stocks. "Currently, US large cap energy companies are trading for roughly 1.5x book value, well below the market average and the sector's historical values," Koesterich said in the note. The better opportunities may lie with higher yielding international energy names, "which are even cheaper than US large cap energy companies," according to Koesterich. The iShares S&P Global Energy Sector Index Fund

currently trades with a price/earnings ratio of less than 12 and 1.88 times the weighted average book value of its 91 constituents. On the other hand, the iShares Dow Jones U.S. Energy Sector Index Fund

has a P/E ratio of almost 13 and a book value of 2.2. IXC allocates about 24% of its weight to Exxon and Chevron, but Royal Dutch Shell

, BP

and Total, Europe's three-largest oil companies, respectively, figure prominently in the fund's lineup along with other international oil names. Another option for investors to consider is the iShares MSCI Global Energy Producers Fund

, which is

. Investors looking for some yield among emerging markets energy equities should consider Ecopetrol

, Colombia's state-run oil company. The shares currently yield 3.6%, triple the piddly yield offered by Brazil's Petrobras

. Ecopetrol is the largest holding in the Global X FTSE Colombia 20 ETF

and is also featured in the EGShares Energy GEMS ETF

, among other funds. For more on international energy ETFs, please click

.