With the oil prices moving a lot from one day to the next, many of us are left wondering what could be the best solution when investing into an oil stock: buying it or selling it. As Eric Bolling underlines in TheStreet.com, last week was the first time during the past months when selling was seen as the best option. The reverse side came on Thursday when the European Central Bank President Jean Claude Trichet warned about possible losses. After announcing that nothing changed for the ECB interest rate policy, Trichet said that the ECB might raise their interest rates which are already hitting high levels.
Last week's oil move proved that even oil prices can be manipulated in their rally. It looks like a few comments added at the right time can dramatically change the course of events. Congressman Bart Stupak's comments that he found nothing illegal going on in the oil price rise were enough to make new longs raise the price $5.49 per barrel for the first time ever.
Then, crude oil prices were given another boost when a Morgan Stanley analyst announced he expects oil prices to hit $150 by July 4, of this year. This came on the heels of rumors that we may see an attack on Iran in response to the country's refusal to accept United Nations' resolutions regarding their uranium enrichment program. All said and done, oil prices made a pretty remarkable 8.8% price gain during the week.
Taking a look at the current oil crisis, Sen. Barack Obama is thinking about an alternative to fix the problem... and this could be by using subsidies to the alternative energy world. However, investors should keep the attention on oil stocks as many other opportunities to make money could come. As Bolling underlines, this could involve selling positions in companies such as BP (NYSE: BP) or Exxon Mobil (NYSE: XOM), or keeping positions in stocks like Chevron (NYSE:CVX) which is seen as the best company on earth.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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Reader Comments (Page 1 of 1)
6-09-2008 @ 4:03PM
F. W. Applegate said...
Hooray again to everyone who buys-in to big oil..keep padding the rich people's pockets and screw the working poor and middle class.
It's too bad we all can't be on the same side.
FWA
6-10-2008 @ 10:40AM
Bill Lilley said...
You are not alone,the whole US cannot depend on elected leaders who are rich and dividing our country to be very rich and very poor. Brazil,Russia,China India are the top four economic powers. Don't worry Bush will save the U.S. yea right. Way past time for the citizens of the US to fight back,You want to control the Government,everybody in the whole country must stop paying taxes,sell all your oil stocks,people are not loyal and do not stick together.greed has turned this country into twisted evil,while making other countries richer.
6-11-2008 @ 2:39PM
mstransky said...
oil up or down? buy stocks? No way!
Sure after the Government's demand answers and say there is no
shortage and demand answers from the speculators THEN the prices seems
to fall. Only after the tax on oil companies was block gave
speculators to drive the price up once again on the claim the reserves
dropped from last week. However the speculators are drive prices on
reserves on hand only that day.
Once the oil meeting takes place and the changes which come from it on
producing more oil during less peak periods of the year to top off
supply reserves during spring and fall months. Along with restricted
land(s) to be open to new drilling. Speculators will not be able to
drive prices on daily assumptions for the coming months.
Even if speculators claim there is not enough oil in smaller areas
opening up, and that those areas will not last more than a decade or
two. Still that is a major stepping stone to stand on oil till
alternate energy sources can be developed in the next ten years and
mass produced for energy demands such as electric heating from solar
and new nuclear plants which are more proficient then 20 years ago.
That will lessen the oil demand for heating & diesel generators over
the next ten years and more.
At the moment speculators have an upper hand today (summer season) but
as the fall comes they will not be able to speculate driving prices
down as reserves catch up do to many of the changes above.
A barrel of oil on the market should be between 50-60 a barrel but is inflated due to speculators. Now with everything coming to light and changes to come Speculators really will not be able to scream shortage in the next ten years as oil demand outsources to greener energy AND electric plants being built to make electric heating far cheaper than oil heating. Also while useing some offlimit drilling areas to stone step the next decade or two.
I see the hype bubble reached its limit this year IF the above comes to light this fall and not next year. If next year, YES speculators could have the ball in its court to fear the stock up in price.