Is Oil A Risky Investment With The Trend Of More Fuel Efficient Vehicles And The Downturn In The Economy?
I’ve heard that the oil refineries are scaleing back production of gasoline to keep the price up. Would refiner based companys be a better investment?
Well, don’t invest any money you can’t lose. But in general utilities and oil are comparably good investments.
I would put at least one ‘big oil’ in your portfolio. COP or XOM are both trading down this year, might be a good time to get in.
Or buy VDE which covers all your bases in the oil sector.
Oil is always going to be in huge demand. The demand will most likely outpace supplies for years to come since alternative energy sources are in their infancy. Safest part of the industry are the oil equipment suppliers We will never stop drilling and they will never stop supplying the equipment.
I don’t think oil is very risky seeing that demand keeps rising every year, while the supply has plateaued or maybe be declining. Since supply hasn’t been able to keep up with demand, the price will go up eventually.
That being said, with the slowdown fears in the US, I could see oil getting down to the $80 range. If/when it does get that low, then I’d start to look at some oil investments. I prefer the oil service companies like RIG or NOV, or you can just by the OIH which is the ETF. Alternative energy is good too, GEX is a good ETF for that.