Is it too late to invest in OIL?

Question

Seeing as we are likely on the downslope of world oil production, is now a good time to invest? Prices will continue to go up, but growth is impossible?

Answer 1

The newest development seems to be a slowing of global demand, due of course to those high prices. Sure, there might be an adjustment by the OPEC in cutting production, but that would only stimulate pricing. And, just look at the forward options prices, all the money is in Calls going five years forward, as compared to the Puts. There's a fancy Greek name to describe that phenomena (Alpha, Theta, Beta, Gamma, Whatever).

That would suggest that the World expects more volatility rather than the comfortable alternative energy solutions that we've come to expect from our superheroes.

So the next test will be from the consumer (sound familiar?). How much can he (she) be squeezed and how much can he (she) give up in terms of convenience? When that tolerance level is reached, Oil has bottomed.

Answer 2

no, i don't think so. i expect the price to stabilize around $100. OPEC is already planning to cut production, and any recession China and India will be going through won't last forever.

Answer 3

Oil is here to stay, and it will be decades before they ever find a replacement for it (if ever).   The demand for oil is ever growing, the supply will keep up with the demand but those currently supplying the US with oil has always threatened to cut back on production and do every so often.

So for long term investing oil is a good investment, there are no bases for your statement that oil is on the down-slope.  There are more and more products that require oil, even if the country goes wind power, something will have to lubricate the mills and or generators.

Growth in oil will be there in my lifetime and in yours.  There are too many products and uses that will make oil grow

Answer 4

some people say it is

some people say it isn't