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I think we are near the bottom in oil prices. What is the best way to catch the rise in oil prices? Should I buy the energy ETF, XLE or invest in say, Chevron? Are there any more direct oil ETF's?
Any advice?
I think it's premature to think that oil doesn't have any more down side. The January oil contract was sold last week and now they are bidding on the February contract, so it would be understandable that oil would go up on the new contract for now.
I think we are near the bottom in oil prices. What is the best way to catch the rise in oil prices? Should I buy the energy ETF, XLE or invest in say, Chevron? Are there any more direct oil ETF's?
Any advice?
A good safe position would be 1/3rd XOM + 1/3rd CVX + 1/3rd XLE.
If you are thinking of investing, say $10k in oil investments, then only buy $2,500 today and another $2,500 in a couple months and so on.
In the recent drop to almost $26, some producers simply shut-in their production. Oil can drop below $20, but not for long, but on the other hand, it could rise to $40 for months before going back down ( if it does ).
As long as the biggest oil companies have adjusted their operations ( and laid-off enough people ) to make money at the current prices, their prices won't be going lower ( or at least for very long ) unless the whole market goes lower.
Since OPEC has shown itself to be impotent, they might strive to show that they have meaning and jointly curtail production enough to force oil up to $40-50. At that price, the offshore and arctic projects aren't going anywhere and the shale producers probably wouldn't alter their behavior much.
Such an announcement - even if there is cheating - would raise the price quite suddenly. I'd bet money that they will do this in 2016. I guess by holding some oil company stock I AM betting that money.
A good safe position would be 1/3rd XOM + 1/3rd CVX + 1/3rd XLE.
If you are thinking of investing, say $10k in oil investments, then only buy $2,500 today and another $2,500 in a couple months and so on.
In the recent drop to almost $26, some producers simply shut-in their production. Oil can drop below $20, but not for long, but on the other hand, it could rise to $40 for months before going back down ( if it does ).
As long as the biggest oil companies have adjusted their operations ( and laid-off enough people ) to make money at the current prices, their prices won't be going lower ( or at least for very long ) unless the whole market goes lower.
Since OPEC has shown itself to be impotent, they might strive to show that they have meaning and jointly curtail production enough to force oil up to $40-50. At that price, the offshore and arctic projects aren't going anywhere and the shale producers probably wouldn't alter their behavior much.
Such an announcement - even if there is cheating - would raise the price quite suddenly. I'd bet money that they will do this in 2016. I guess by holding some oil company stock I AM betting that money.
Thank you, this is helpful. What oil company stock are you holding?
AND by "Best" you mean the highest return on your money at risk . . .
THEN, Go Long on Oil Futures.
IF you can sleep at night knowing that each penny move in the CL will cost you ten bucks per contract. It adds up; a 1.00 move is 1000 bucks. There is no reason to believe it couldn't go down another 10 to 15 dollars a barrel. Put on ten contracts and pretty soon you are talking real money.
Intraday trading the CL can be profitable for experienced traders. If you have no experience trading thin futures markets CL is not a great market to be in.
IF you can sleep at night knowing that each penny move in the CL will cost you ten bucks per contract. It adds up; a 1.00 move is 1000 bucks. There is no reason to believe it couldn't go down another 10 to 15 dollars a barrel. Put on ten contracts and pretty soon you are talking real money.
Intraday trading the CL can be profitable for experienced traders. If you have no experience trading thin futures markets CL is not a great market to be in.
I COMPLETELY Agree with you.
That was why I was conditioning what the OP meant by "Best."
You do not see putting ONE THIN DIME towards Any of this.
Only folks I know who can do Oil Futures wisely and safely is Southwest Airlines. Because they have already budgeted the fuel costs in advance, and this just functions as a Future Price Assurance Hedge for them.
For my personal side of things, I finished and turned down new on all my own Oil Projects since last year (December 2014).
Well, I . . . almost . . . wandered into a Libya one late this last Summer. But I have not heard from those folks for some months, now. Wonder if they are all still alive?
I bought CVX in the low 70's back in August when oil was in the 40's, XOM was bought in the high 60's. IMO their shares are over priced for any extend downturn in prices at this level. They aren't covering their dividends with their cash flow, they are all taking on debt to fund them. Long term as a buy I don't personally feel good and sold all my shares when they went up. That being said XOM and CVX are two of the best with low debt to begin this cycle.
I'm actually intrigued with mining stocks right now.
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