Topic: IF oil is going to hit $100/barrel, what are the stocks to invest in? @枫下论坛 The Rolia Forum

IF oil is going to hit $100/barrel, what are the stocks to invest in? -hilo(still mellow); 2007-7-19 {454} (#3497@43)
Some considerations: refineries and processing company in NA don’t necessary benefit (a lot) from the price increase, as demand will somewhat go down;
Drilling companies may or may not benefit from it, depending on how much reserve they have and their drill cost;
Oil sands will benefit as they become more profitable. (can anyone give some symbols on TSX?)
Alternative energy – I am doubtful of nuclear, bullish on solar, and want to explore wind.

5 years ago it was about 23/barrel (inflation adjusted). Who thought it can hit 70 today? -hilo(still mellow); 2007-7-19 (#3500@43)

If you are so sure about it. Simply buy oil future or ETF. -jeffl(jeffl); 2007-7-19 (#3508@43)

like I said, not all drilling company or refinery are going to benefit from the high price, as their cost are rising too. -hilo(still mellow); 2007-7-19 (#3513@43)

What I suggested were QM (Crude Oil future) and USO (Oil ETF). They are related to oil price only. They have nothing to do with oil companies. -jeffl(jeffl); 2007-7-19 (#3515@43)

got it. thanks. -hilo(still mellow); 2007-7-20 (#3523@43)
I checked the historical price of USO and find it doesn’t track the spot price very well. For example, compared to Jan 07, light sweet crude spot is up 49% but USO is only up 21%. Any comment? -hilo(still mellow); 2007-7-20 (#3525@43)

You are right. Most Oil ETF's are using derivatives such as futures and options to trace the oil price. There are costs to roll over contacts when futures and options expires. -jeffl(jeffl); 2007-7-20 {223} (#3527@43)
So over a long time, they tend to lose values even the underlying oil price is unchanged. So it is good for short term trading. If you want long term investment, you can buy the big oil producers like Exxon, Chevron and BP.

I personally own xeg.to. I don't have uso. If you can buy U.S. stocks without currency conversion loss, OIH is better. -jeffl(jeffl); 2007-7-20 (#3531@43)

from Motley Fool, comment on OIH. I don’t know whether that's true, but might be worth sharing with you. -hilo(still mellow); 2007-7-20 {475} (#3540@43)
“Oil service firms are the most volatile part of the oil and gas industry. They tend to lead the way up when crude is rising, but they fall much harder than the large, integrated firms when the cycle turns down. Couple this downside exposure with the highly concentrated nature of this particular basket -- only 18 stocks in all -- and you've got a real hot potato. Handle this one with care.” – http://www.fool.com/investing/etf/2007/07/18/7-ways-to-win-with-energy.aspx

完全有可能! -wowangle(追风); 2007-7-19 (#3510@43)
It is funny that when oil is at $50, it says it will go to $40 or $30, when oil is at $70, people are talking it will go to $100. -laotang(laotang); 2007-7-20 (#3530@43)

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