Oil stocks have been reaching new highs. Here are 7 reasons why they are still a good buy 1. Saudis - the largest exporter of oil announced an additional 300K barrels a day. The market just ignored this and oil price rallied. 2. The gap between supply and demand is 2 million barrels and there is no short term solution for this. 3. India and China are becoming top consumers - India last year put 1.5M automobiles on the road. 4. Frequent interruptions to production in Nigeria - a major oil exporter to the US. 5. Exports from Mexico - the third largest exporter to the US not growing sufficiently. 5. US needs to keep borrowing cheap with low interest rates to kick start their economy 6. Media and oil executives sometimes talk about oil reaching $200/bl. 7. It will take 10 years for offshore and arctic drilling to impact gas prices at the pump. Bottom line - when supply exceeds demand and there is no short-term method to increase supplies, prices will go up. Oil Company stocks too.
Always, consult your investment advisor before you invest in stocks
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June 25th, 2008 at 1:43 pm
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June 27th, 2008 at 5:09 am
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