It certainly does not look that way based on how well the exchanged traded for oil, United States Oil (NYSE: USO) is doing!
For 2014, United States Oil has jumped by more than 4.4 percent. It is up for the last week, month, quarter, and year of market action (chart below). Making the case for oil even more bullish is that the Commodities Futures Trading Commission reports that major institutional investors such as hedge funds and private equity groups are very bullish about the future price of oil based on positions taken in the market.
Many, many previous articles on this site have been bullish on oil stocks.
The demand for oil will only increase. That has been the finding of every report, ranging from the International Energy Agency to one by BP (NYSE: BP), the British oil giant. Oil and natural gas are still the best fuel sources. Coal is simply too dirty. Alternative energy, as detailed in another article, is flailing away, like wind turbines in a summer breeze.
For investors, there is a wide selection in the oil sector.
ExxonMobil (NYSE: XOM) and Royal Dutch Shell (NYSE: RDS-B), the two biggest oil companies, are two of the largest publicly traded firms in the world. BP is another fine “Big Oil” stock. These all have high dividend yields. If investors are looking for high growth, there are small caps like Mondial Ventures OTN: MNVND). Mondial Ventures operates in the oil rich areas of Texas.
The exchange traded fund, United States Oil, offers exposure to a wide variety of stocks in the sector.
Oil will power much of the growth of China, India, and the other countries whose economies will expand the most in the future. More than 90 percent of the increase in the demand for energy will come from these nations. That is bullish news for securities in the sector such as United States Oil, Mondial Ventures, and ExxonMobil, among others.