Those new to the investment game may feel overwhelmed by their options. One option that may be yet unknown is investing in oil stocks.
Like investment in other sectors, there are a lot of ways to get involved. Energy consumption for oil products and crude oil is rising every year, making this a solid investment route.
Although environmental awareness is growing, the world’s reliance on oil is not going anywhere. It may be a volatile industry susceptible to global politics, but it’s still expanding regardless of these factors.
To find out more about why you need to be investing in oil stocks now, check out the guide below.
History of Oil Consumption
Knowing the stability of an industry can go a long way when trying to make sound investment decisions. That’s why it’s important to know a brief history of oil’s significance in world history to understand its investment behavior.
Around 4,000 years ago, Ancient Greeks wrote about the abundance of oil and its usefulness in society. About 2,000 years ago, the Chinese wrote about their use of petroleum. For thousands of years, people extracted oil to create products and use for fuel.
Today, oil use is surrounded by controversy and politics. Despite this, the industry is strong and oil investors can make a killing with the right investments. In 2008, prices rose to $146 per barrel. In 2014, again, prices climbed to $100. If you hold out for it, you can make a huge profit with little effort.
Oil Prices Are Low
Even the least experienced investors know it’s best to get in when prices are low. With the crude oil price today falling due to economic sanctions now is the time to invest.
The end of 2018, specifically November and December, saw oil prices drop sharply. In 2019, however, predictions indicate that oil prices will sharply rise again. To anticipate this rise and make an impressive profit, investors have to get in before the price per barrel jumps too high.
Shale Bands and Booms
One of the main reasons for the changes in price is due to the shale band. This is partially what controls the supply of oil. Less oil means more money per barrel.
The shale drillers turn down their production when oil prices run too low. This is because they are not making enough money. They choose to reduce the supply, driving prices up, so they can make more.
With oil prices running so low at the end of 2018, you can bet that the shale drillers are almost ready to take a break. Make sure to buy before the lack of supply drives oil prices up again.
Investing in Oil Stocks and More
Is investing in oil stocks one of your financial New Year’s resolutions? If so, it has to be done at the right time. You don’t want to go all in when the cost per barrel is high. This means you can lose a large part of your investment with the price inevitably dips.
Despite the volatility of the oil market, it always climbs back up. Don’t make the mistake of impulsively selling off your stock only to see prices soar again in the next quarter. Watch international energy policies closely to anticipate the best time to buy.
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