Question:

Should I buy shares in oil?

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If oil is rising at such a rate, and is expected to continue to rise, would it be wise to buy shares in an oil company. I only ask as I have been left a small nest egg from a relative, and would like to 'use it' to make more money.

I know virtually nothing about shares etc. Would you buy oil shares? what companies sell them. Additionally, has anyone any suggestions regarding the buying of shares?

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  1. Just because the price of oil is rising, it doesn't mean that the companies capital is. Their capital is staying just about the same, in-fact, it's just that prices are rising due to lack of oil reserves. ie. investing in oil is a BAD idea.


  2. no no! oil is very volatile nowadays and there is no need to trade large volumes in such a volatile commodity or share. some oil analysts predict the price of oil to touch 150 dollars by july 4. others like arjun murti of goldman sachs are of the view that price of oil should touch $75 (the same guy who recommended $200 per barrel of oil)

  3. Not at current prices. Oil will shortly be back to $100 buy then (Shell at £16 rather than the £20 now)

  4. No. Do not buy shares in oil. You can buy shares of oil companies.

  5. If you know virtually nothing about shares, don't buy them.  For every winner on the stock market, there's a loser - and guess where you'd come.

  6. If you expect to cash in on indefinitely rising oil prices, you should buy actual oil, then just wait for the price to go up to $1000 a barrel. However, there's always the possibility that they'll develop another huge oil reserve, temporarily driving the price back down to $30 (and temporarily could be a few decades).

  7. Oil may have had its run for the moment.  3 years ago would have been a good time to have asked this question.   Every time now that oil drops $2.00 a barrel the oil stocks get hammered and oil could easily drop about $30 a barrel.  

    What companies sell oil shares. You can buy them at Scottrade for about $7.00 a transaction.  They are on the internet.  Among the companies that are oil companies are the following:

    Conoco Philips ticker COP

    Exxon Mobile ticker XOM

    Chevron ticker CVX

    Marrathon Oil MRO

    Those 4 a large integrated oil companies

    Apache APA

    Devon  DVN

    Andarko APC

    Are among the large independent oil and gas producers.

    There are also many smaller companies

    Cabot Oil  COG

    St. Marys Land SM

    Plains Exploration PXP

    There are several ways in which you can buy a pool of many oil companies.  These are call mutual funds.  That way you reduce your risk that the one oil company you did buy turns out to be a dud.

    PEO is a closed end fund you can buy like a stock.  It owns stock in many oil stocks.  Since 1979 its annual return has averaged over 12%.  It many not in the future however.

    There are any number of index funds you can buy that are oil related.  These are low cost unmanaged mutual funds.  Among these are IXC,  VDE, PXI, and many more.  

    You can also buy an open end mutual fund through a fund company like Fidelity.  Their offerings are FNARX and FSENX.  They do not charge a fee to buy, but you do have to buy at least $2500 worth of the fund.

    Since you are a novice at investing, it would be my suggestion to think instead about investing in a broader portfolio of investments.  Since most stocks other than oil stocks are selling at very reasonable levels currently it might prove less risky to make a broader investment.  

    Oakmark Global is such a fund.   It does include some oil stocks in its portfolio but also many other well chosen stocks.  And their minimum investment is only $1000.

    http://www.oakmark.com/funds/single/sf_o...

  8. Keep Cains and ONGC in your watchlist... You can certainly buy them keeping a long-term view

  9. View It Now: http://www.SXCpro.com

  10. Only if you can find an oil exploration company that has a good chance of finding new reserves and you can afford the gamble. Otherwise you will not see much growth - BP has major trouble in the US and in Russia and Shell has big labour troubles.

  11. why not get a commodity index tracker?

    the fees are small and it's more broad so less risk.
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