What's the best way to make money on higher oil prices going forward? - GoFuckYourself.com

Socks · 04-23-2008, 04:02 PM

I'm pretty sure the gas prices are changing from what it costs to produce etc, to what the market will bear. It's a whole new ballgame of rich vs poor, and a massive anal cleanse. They want people to stop using so much gas, the gas has like tripled in price last decade, and is accelerating like nuts. But - everyone is still driving.

The market has proven, imho, that they're willing to pay more, and people losing their entertainment driving is just great for everyone but the people affected.

So, what's the best way to make money while these prices skyrocket? Just buy stocks in gas companies or is there a better way to invest?

WiredGuy · 04-23-2008, 04:03 PM

Mutual funds and stocks of oil companies.
WG

woj · 04-23-2008, 04:13 PM

futures options, if you end up being right, you could make ton of $$ rather quick...

Will Black · 04-23-2008, 04:13 PM

Invest in wind and solar.

dready · 04-23-2008, 04:25 PM

Don't invest in the oil.. invest in oil supply companies. The ones that build the rigs, pipelines, and other equipment. As reserves dwindle, more and more wells need to be drilled to try to keep the supply going.

ADL Colin · 04-23-2008, 04:38 PM

I've been long oil and gas companies for a while. Getting ready to pair my positions back a bit though. Oil just missed $120 this week and though it might go higher it is pretty difficult to bet on that. I would look for individual oil and gas companies that appear to be undervalued based on their reserves. Gazprom and Lukoil are interesting since they seem to be priced well based on their reserves but there is probably a risk penalty associated with their being Russian companies.

Learn everything you can about energy companies. Read as many SEC annual reports as you can. Learn about crack spreads (refining margins) and what % of revenues for various companies typically come from refining. Oil is selling at a fantastic price right now but gas at the pump isn't high compared to the normal ratio so refiners are getting hurt. Also the higher the oil prices are the more companies want to drill so the cost of renting drilling equipment goes up squeezing profits some. There are just so many things to understand so do so.

Oil and Gas Journal is worth the subscription. Buy the book "Twilight in the Desert". Whether you agree or not with the premise you should understand the thesis. Also Boone Pickens book is pretty decent and he has a new one coming out. There's an old book by Kurt Wolff that you can still find that is very good as he details how to value oil and gas companies by discounting their reserves over a number of years. I think it is a late 80s book or something like that but still some good insights.

SomeCreep · 04-23-2008, 04:39 PM

Quote:

Originally Posted by Socks

So, what's the best way to make money while these prices skyrocket? Just buy stocks in gas companies or is there a better way to invest?

Stay out of the oil market, unless you're a professional investor and really know what you're doing. Oil is a bubble and when it pops, oil prices will pull back hard along with stock prices. Is there more upside to be had from current levels? Yes, but no one knows for how long. There are plenty of economic indicators which point to oil being a bubble. Explain all of them in detail, I will not.

However, take into account that oil prices have been skyrocketing along with alternative energy "solar" stocks. The fact that both are going up in parallel is contradictory. Either oil is a bubble, solar is a bubble, or both.

SomeCreep · 04-23-2008, 04:45 PM

Quote:

Originally Posted by dready

Don't invest in the oil.. invest in oil supply companies. The ones that build the rigs, pipelines, and other equipment. As reserves dwindle, more and more wells need to be drilled to try to keep the supply going.

That's good advice, except that all of the oil suppliers and drillers are already up huge in the last 6 months. Especially, Transocean (Ticker symbol: RIG). Sheeesh, up nearly 100% in 12 months.

04-23-2008, 04:02 PM	#1
Socks Confirmed User Industry Role: Join Date: May 2002 Location: Toronto Posts: 8,475	What's the best way to make money on higher oil prices going forward? I'm pretty sure the gas prices are changing from what it costs to produce etc, to what the market will bear. It's a whole new ballgame of rich vs poor, and a massive anal cleanse. They want people to stop using so much gas, the gas has like tripled in price last decade, and is accelerating like nuts. But - everyone is still driving. The market has proven, imho, that they're willing to pay more, and people losing their entertainment driving is just great for everyone but the people affected. So, what's the best way to make money while these prices skyrocket? Just buy stocks in gas companies or is there a better way to invest?

04-23-2008, 04:03 PM	#2
WiredGuy Pounding Googlebot Industry Role: Join Date: Aug 2002 Location: Canada Posts: 34,460	Mutual funds and stocks of oil companies. WG __________________ I play with Google.

04-23-2008, 04:13 PM	#3
woj <&(©¿©)&> Industry Role: Join Date: Jul 2002 Location: Chicago Posts: 47,882	futures options, if you end up being right, you could make ton of $$ rather quick... __________________ Custom Software Development, email: woj#at#wojfun#.#com to discuss details or skype: wojl2000 or gchat: wojfun or telegram: wojl2000 Affiliate program tools: Hosted Galleries Manager Banner Manager Video Manager Wordpress Affiliate Plugin Pic/Movie of the Day Fansign Generator Zip Manager

04-23-2008, 04:25 PM	#5
dready Confirmed User Industry Role: Join Date: Oct 2002 Location: Toronto, ON Posts: 5,247	Don't invest in the oil.. invest in oil supply companies. The ones that build the rigs, pipelines, and other equipment. As reserves dwindle, more and more wells need to be drilled to try to keep the supply going. __________________ ICQ: 91139591

04-23-2008, 04:38 PM	#6
ADL Colin Too lazy to set a custom title Join Date: Feb 2001 Location: Tube Titans, USA Posts: 11,929	I've been long oil and gas companies for a while. Getting ready to pair my positions back a bit though. Oil just missed $120 this week and though it might go higher it is pretty difficult to bet on that. I would look for individual oil and gas companies that appear to be undervalued based on their reserves. Gazprom and Lukoil are interesting since they seem to be priced well based on their reserves but there is probably a risk penalty associated with their being Russian companies. Learn everything you can about energy companies. Read as many SEC annual reports as you can. Learn about crack spreads (refining margins) and what % of revenues for various companies typically come from refining. Oil is selling at a fantastic price right now but gas at the pump isn't high compared to the normal ratio so refiners are getting hurt. Also the higher the oil prices are the more companies want to drill so the cost of renting drilling equipment goes up squeezing profits some. There are just so many things to understand so do so. Oil and Gas Journal is worth the subscription. Buy the book "Twilight in the Desert". Whether you agree or not with the premise you should understand the thesis. Also Boone Pickens book is pretty decent and he has a new one coming out. There's an old book by Kurt Wolff that you can still find that is very good as he details how to value oil and gas companies by discounting their reserves over a number of years. I think it is a late 80s book or something like that but still some good insights. __________________ Adult Date Link - $50 PPS starting NOW! -- good and JUICY! skype = "adultdatelink"

04-23-2008, 04:13 PM	#4
Will Black Confirmed User Join Date: Jul 2007 Location: USA Posts: 261	Invest in wind and solar.