You literally have thousands of choices when it comes to oil, oils, oil pipelines, and similar investments in gasoline and natural gas–or other energy investments. However, I will keep this directly to oil and related investments.
Exxon Mobil is the largest company in the world. It’s the juggernaut that keeps on giving to its shareholders.
Yet, Exxon as an individual holding may be too sensitive to everything from environmental laws to alternative technologies to erratic oil prices to world competition. (I think Exxon is a terrific core holding, but it’s important to look at other opportunities.) And, I have to mentioned that Exxon Mobil closed today at $65.00, (it was $75.00 a month ago and was at $95.00 in June 2007). I own XOM, so I am giving full disclosure on it. It’s share price is down because they announced that they are buying XTO for $41B, to get more exposure to natural gas—which will be our bridge fuel to wean the United States off of foreign oil. Natural gas is cheap, is 25% cleaner than gasoline and diesel and there is twice as much natural gas in the U.S. than there is oil in Saudi Arabia. XOM is clearly thinking 10-20 years down the road—but at $65.00 XOM is clearly a bargain stock.
One possibility is to simplify one’s approach. You think oil is going from $73 per barrel to $95 per barrel, then you might only want to deal with that thesis; specifically, you have investments like the Claymore MACROshares Oil Up Tradeable Shares (UCR) and the United States Oil Fund (USO). The former tracks the NYMEX Division Light Sweet Crude Oil Futures Contract whereas the latter follows the spot price of West Texas Intermediate Light Sweet Crude.
It should be noted that USO has been criticized a great deal for failing to capture the intended index in the past. That said, its volume is exceptionally large, making it the preferred method for profiting from rising oil prices. However, USO has lost 10% of it’s value in the last three months—as oil has fallen in price to $73.87 at today’s close on the NYMEX exchange.
Now, back to the price of oil–Crude at $95 This Year? (click on the following link: http://bit.ly/aueQVw ) CNBC is reporting oil could get to $95.00. So, all oil stocks and energy stocks should go up with the price of oil.
(KMP), Kinder Morgan Energy Partners, is a Master Limited Partnership, that has to distribute 90% of their profits to shareholders. This is a great stock that pays about 4% dividend and makes money by transferring oil, gasoline and natural gas through their pipelines. Unfortunately, this stock is at it’s 52 week high. However, if the price of energy (gas, oil, natural gas) goes up or down—people still need these products and they are always making profits for their company–of which 90% goes to their shareholders.
BlackRock Global Energy and Resources Trust (BGR). It invests in common stocks, preferred stocks, convertible securities, warrants, and depository receipts while serving a 5% annual yield distributed quarterly. (And its 2-year track record smooths out the bumpy ride of ever-changing oil prices.) BGR is down about 10% from it’s 52 week high—and is much cheaper than KMP. KMP is trading at $62.62 as of 1/28/10 and BRG is at $23.73 on 1/28/10.
Oil partnerships that trade on the exchanges may not be ETFs per se, but they are important for comparison. Magellan Midstream Partners, LP (MMP) has a yield of 6%+ and a perfect record for raising its quarterly dividend since its 2001 inception. While it is a pipeline, and while gasoline distribution is not necessarily tied to the price of the refined commodity, it’s hard to ignore a solid income producer in the oil patch. MMP is trading at $43.10 today, just a dollar or so off it’s 52 week high.
There is one energy ETF to stay away from. Under no circumstances ever buy UNG (United States Natural Gas Fund). It tracks the spot price of natural gas, and the price of natural gas is just above it’s seven year low. This may be a fund to get into in the future (when our country recognizes the need for cheaper, cleaner burning (25% or more less carbon that oil, diesel, gasoline and coal) and a resource that is in abundance in the U.S.
I just bought a 2001 Mitsubishi Mirage, the owners manual wasn’t with it, was hoping someone knew what type of oil to use. My guess is 10W-30 But I want to make sure its the right oil for the car.
According to the Mobil website your car calls for 5w-30. If you live in an area where the temperature drops below 0 Fahrenheit this is the the viscosity to use. Reason being: 80% of all engine wear occurs during the first few seconds the car is started. It’s imparitive the oil in the crankcase is pumped to critical engine parts quickly. Higher viscosity motor oil actually makes the oil pump work harder throughout the rpm range.This costs efficienty and horsepower. Lighter viscosity oil "adsorbs" heat inside your motor more efficiently keeping internal parts cooler, and helps give you better gas mileage. The correct viscosity will allow the starter to crank the engine easier in cold weather, particularly if your car is parked outdoors.
Don’t use dime store oil filters. Napa filters are made by Wix. They’re very reasonably priced and among the top three brands.
Never on this green earth put 10-40 anything in any gasoline engine. The small handbook in your glove compartment has the best information possible as far as upkeep and service schesules. If you were to pick a brand, Mobil, Quaker State, Havoline and Valvoline are among the best of the mineral based oils.
If you’d like to give your car a treat, Mobil 1 full synthetic 5W-30 pours @ 53 degrees bellow zero F. That’s a full 20 degrees lower than their mineral based 5w-30. This will help your car start even easier and 5,000 mile oil changes is all that’s necessary. After 12,000 miles and two oil changes you will have paid less for synthetic than you would have if you had changed the oil with regular oil four times @ 3,000 mile changes.
Ok I don’t actually live in the US but the attitude of the people towards their most recent president is shocking. Its all well and good to be remembered as a great president during boom times because nothing goes wrong but Obama was given a steaming pile of …..lets say socks for censorships sake. What did the people really expect? That he would somehow pull the country out of the toilet when he has only been in power for a year? Even though the minimum to take a country out of a recession is 3 for most developed countries.
And the there are people calling him a socialist, and how bad that is. One of the strongest countries in the world, Germany, has adopted many of the traits of a socialist country. Socialism isn’t bad. Its just different. Is it ignorance of the American people that leads them to believe its the Apocalypse?
And on a forum recently there were several HUNDRED comments on how Obama is a dumbass etc for not using The US’ oil reserves. I was truely astonished that people can be that short sighted. In the short run the oil may be cheaper but when it runs out other countries will have the US by the balls. Which is why it is being done the other way around at the moment. And then a few comments even suggested that Palin should be the next President…..my god. She is a fine politician yes but she talks big and gives Obama a slating but that means jack until she is in his position. Politics 101 people.
As for the Guantanamo Bay issue, well at least he is TRYING to keep to his word. Most politicians are all talk but once they get power they just say "Oh I can’t do that,sorry". Yes his administration has missed the deadline but they have made progress towards its eventual closure.
My final gripe is that of the war in the Middle East. I do not agree with this war at all but I can understand that from an economic point of view it would cripple the US economy if he withdrew all the troops.
People it is easy to pin the blame on one man when he is looking after 300 million others, cleaning up the mess of the single most under qualified President of the US ever and trying to juggle these with the everyday issues that arise.
Open your minds.
You said it pal, you don’t live here. We don’t like socialism, big government, arrogant leaders or people that don’t understand limited Constitutional Republics. You may think a "little socialism" isn’t bad, but it never ends there and keeps growing. It’s like a little bit pregnant. No one is blaming Obama for everything, it’s just that he has pushed us pass the tolerant level. He and people like him have finally awakened enough Americans and we want our country back..period. Arm chair liberals (assuming you are that flavor) never get it, America was founded on principles not loved by the left such as our bill of rights. When you mess with our country, people, liberties or attack us (9-11) you personally mess with each one of us and that’s when you get hurt. With all due respect to your beliefs, don’t bash us for your lack of understanding of ours. Have a nice day.
i am making a german chocolate cake and we are out of vegetable oil can i make it with olive oil instead…it only calls for 1/2 a cup of vegetable oil.
yes you can subsitute olive oil for vegetable oil the only difference is one is made from olives (and better for you than veg oil)
Found out that new cars that use synthetic from factory like mercedes don’t require oil changes until 13,000 miles. Does that apply to any other car that uses synthetic oil too?
Never stretch your oil change intervals past the factory recommended mileage as printed in your service book. This is very important as long as the car is under factory warranty. There’s no stipulation in your book that you can choose to go longer if synthetic oil is used. Ford, Chrysler and GM recommends no more than 8,500 miles under the best conditions on their new cars. The Dodge Viper and some Chevrolet Corvette models come from the factory with Mobil1 in the crankcase. Oil change maximum remains the same.
Toyota (mine not Mike’s) recommends 5,000 mile oil change intervals probably do to the fact excess heat created by the catalytic converters which are so close to the cylinder-heads. Toyota makes no exceptions concerning the brand or type of motor oil used. Again, if you ever need documentation about oil change intervals while the car is under the power-train warranty it’s foolish to test the system.
In my opinion you most likely could stretch these mileage numbers after the power-train warranty and did mostly highway driving. On the other hand why in the world would you skimp and pinch on the most basic insurance on your motor.
good things: they produce gas and oil which are used for energy.
Bad things: poorly maintained or constructed, oil wells can cause oil and gas to be spilled into the enviornment (oceans, seas, rivers, or on land).
good things HEAVILY outweigh the bad things, all of which can be fixed.
What will happen to Australia when the mining boom ends ?
What will happen to construction ?
It might take a while for the boom to end – Western Australia is rich in natural resources. But if it does, I’d imagine the services industry would take its place.
Our nation is dependent on oil, yet price gouging continues unabated. Other services and products within our nation and that our citizens must have are regulated (medicine, banking, food, utilities, etc.) Should our government regulate oil prices?
Regulating prices will do one thing- run oil refiners out of the US. Guess what that will do, raise prices further.
When people conserve demand goes down lowering the price. Remember Adam Smith? He didn’t drive an SUV either….
Bu$h / Cheney has used their buddy relationship with big oil to rip off America while the oil companies successfully lobbied auto makers to keep on producing gas guzzlers.
Would rescuing an industry that made oil men rich be the right thing to do?
I think big oil should bail US out. With the price of gas pushing $5 a gallon earlier this year, they are in large measure responsible for the average American’s food, fuel, and living expenses going up dramatically. This likely played a big part in slowing the economy, though not as big as failed mortgages and the like, it certainly hastened the demise.
Therefore, they, the obscene profit makers, should have to give back all of their tax breaks and pay a lot to offset some of the losses this country has suffered as a result of international greed and stupid speculation.
Oil prices nearly doubled in the last 12 months. I want to liquidate all my assets, buy oil, and sell next year when the price goes higher. How do I do it ? Is it legal ?
Unless you have massive amounts of storage somewhere you can’t buy very much…. One futures contract (currently at $110 a barrel) has a lot size of 1000 barrels. Oil isn’t something you can "buy and hold" unless you can take physical delivery and store it somewhere, which will cost you of course.
If you think oil will continue to rise you are best putting your investment into funds that hold oil as an asset or oil companies.
Outside of that you could try to play the futures market but the cost of entry is quite high and there is not much margin for error. As an example, futures for delivery in March 2009 light sweet crude are at $97.47/barrel for a 1000 barrel contract. You could buy this and hold and try to sell that contract at a later date if it goes up. If it goes down though you are going to have to sell at a loss come Mar 09 as you can’t take physical delivery.