Your Questions About How To Invest In Oil

Paul asks…

Instead of buying stock, what is the next best way to invest in oil?

I want to find other ways to invest in oil. names others ways.

John answers:

Don’t invest in oil right now. I suggest you read about the topic before making your decision, but most analysts believe it is an investment to avoid at the moment. Contrary to popular beliefs, the current world reserves of oils are at very high levels.

Robert asks…

How do you invest into oil?

I would like to invest into oil, but i dont know how to. Can someone help? Is it like investing into Stocks or Gold? Stocks has its own symbols, dose oil too? Or am i suppose to buy oil like I do with Gold?

John answers:

Exxon-Mobil = Symbol XOM. Go to http://www.exxonmobil.com/Corporate/InvestorInfo/Corp_II_ShareholderInvestProg.asp and it will give you the link on how to buy Exxon stock directly from the company. You have to start with $250 or $50 a month through automatic withdrawals, but you can add to it with no fees! If you want to learn how to do this, read “How to Buy Stocks Without a Broker.” It seems to go up 20% a year or more. Good luck.

Richard asks…

Is it not strange that the bottom falls out the oil market and just after, all these banks start failing?

Did these failing banks invest in oil before the bottom dropped out of the market, and couldn’t cover the losses?

John answers:

Banks were in trouble long before oil prices dropped – some had already gone under

Steven asks…

Is investing in OIL companies a good idea If McCain Wins?

If McCain wins you know the Republicans will push for off shore drilling, and the House Democrats will have to follow suite because of National opinion supporting off shore drilling. Do you recommend investing in oil companies, or even companies the support the oil industry.Like refineries mfg.. etc.. If Obama wins. I would have no idea what stock segment to focus on. Do you?

John answers:

Yes in the Alberta Tar Sands such as

Imperial Oil LtdIMO.TO
Suncor Energy Inc.SU.TO
Talisman Energy Inc.TLM.TO
EnCana CorpECA.TO
Shell Canada LtdSHC.TO
Petro-Canada

But McCain will not win

Mandy asks…

Why does a decrease in investment from investors bump up oil prices?

Because investors are unsure about investing in oil stocks (because of a refinery explosion in Texas, a weak US dollar, and other reasons) the price of oil has gone up. How does this work?

John answers:

I think that you are getting confused as to the reasons oil is rising. It is not rising because oil investers are hesitant about buying oil stocks.

There are several reasons that oil can goes up:

1) Actual production problems: explosions in refineries, broken pipes in Alaska, etc

2) Limited capacity: “Crude” oil must be coverted into forms (gasoline, etc.) that can be used by different industries, but the US refineries are already working at full capacity, so even if we have more oil, we can’t convert it fast enough

3) Unstable oil countries. Unfortunately, oil is located in places
such as Iraq, Nigeria, Sudan, Venezuela, etc.. The oil supply from these countries is not that reliable.

4) The oil that is “easy” is to get to is running low, so more expensive methods such as deep-water reserves must be used.

5) Worldwide demand is increasing faster than supply. The US uses the most oil by far, but other countries such as India and China are rapidly catching up.

6) Weak dollar:
2002 1 Euro = $1.00 USD
2008 1 Euro = $1.50 USD
So the price increase seen by other countries is smaller than the price increase seen by us.

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