Oil ETFs

BZ84 · Newbie Joined: 16 Jul 2009 Posts: 1

I'm new to the forum, and relatively new to investing in general, so bear with me.

Am I off base in thinking that oil is, long term, pretty much a slam dunk investment? We know that there is a dwindling global supply and we're a long way from replacing oil as our leading energy source. Any crisis in oil producing regions will likely cause short term price spikes. So while short term the price could certainly fall further , isn't it nearly inevitable that at some point in the future it will approach and even exceed the $150 mark we saw just a year ago? What am I missing here?

It seems that the easiest way to get in oil is through an ETF. Any specific recommendations?

rffrydr · Posted: Thu Dec 22, 2011 9:27 am Post subject:

Of course we now can say the 4.7% drop (having been regained in mere days) was entirely a function of its denomination, the dollar. Specifically the break of the widely believed and stopped against $1.30 level against the euro and nothing whatsoever regarding US consumption. Really we gave up that ghost in summer '08 when gasoline consumption became the last gasp expression of the much by then abused "body politic."

Indeed we have now been exporting our fuel for some time. That would imply the downstream operations of the Majors now perhaps have a value--just as they are being spun off, of course. Oil is primarily a financial phenomenon and I surely doubt the equities will hedge much of anything against the Mideast. The commodity will however--and you've now got a curve to ride to boot. Expect more volatility there however....and leveraged-up on the NYMEX oughtta really put hair on your chest. Twisted Evil

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HenryTo · Posted: Mon Dec 19, 2011 8:18 pm Post subject:

Ed Yardeni on oil demand and energy stocks.

http://blog.yardeni.com/2011/12/crude-oil-price-and-s-500-energy.html

rffrydr · Posted: Tue May 25, 2010 8:32 am Post subject:

This BP is really dispiriting, like watching the powers that be, bleed. Yet value will out.

Madman says:

HenryTo · Posted: Fri Jul 17, 2009 10:37 am Post subject:

Bill, it is nice to see you back again!

Also note that - if you're trading the USO or UNG - tons of retail investors got slammed on both the contango and the monthly rolls last year. When you're trying to get exposure through OTC swaps with a one-man shop, you really need to be very careful:

http://ftalphaville.ft.com/blog/2009/06/11/56933/the-problem-with-commodity-etfs/

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

rffrydr · Posted: Thu Jul 16, 2009 11:16 pm Post subject:

Buy the Russia ETF and get the discount.

I certainly don't believe in this "Peak Oil." And I definitely do not believe in $200 crude. Not even $147 crude--then, or now.

http://www.marketthoughts.com/forum/peak-oil-t1192.html
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Today is the Tomorrow you worried about Yesterday!

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

Lots of folks feel it’s a slam-dunk long-term no-brainer. Devil is in the details. Buggy-whip companies and horse feed looked that way about 110 years ago, back when oil and natural gas on property lowered its value.

Maybe it’s inevitable that oil trades for $200 a barrel sometime, but it might be Dow 40,000 by then, too. On the other hand, maybe battery technology improves enough to get most transportation off the internal combustion engine. After all, it was a technological leap that made oil important in the first place.

You should read the prospectus for USO, found at http://www.unitedstatesoilfund.com/ , if you’re interested in using an ETF to directly track the price of oil.

There are several ETFs that track the stocks of companies whose revenues and profits are levered to oil. This is like a second-cousin, sometimes a “kissin’ cousin,” to tracking the oil price. OIH, IEZ, PXE, PBW, and RSX all come to mind.
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