Many articles on this site have detailed the long term value of oil and natural gas stocks for investors. With oil prices soaring in recent market action due to the possibility of the United States attacking Syria, so have the share prices for publicly traded oil and gas companies. Oil prices move in tandem around the world, no matter where the crude is produced.
The chart below shows how the price of the exchange traded fund for oil, United States Oil (NYSEL USO), has soared in recent trading.
That makes oil and natural gas companies very appealing as long term investments. The Middle East will not settle down any time soon. The promise of “The Arab Sprint” is long gone. There is instability in many other areas that produce oil, such as Nigeria. Royal Dutch Shell (NYSE: RDA-A) operations in that country have long been plagued by violence.
Oil company stocks, both large and small, are ideal for long term investors. Global energy usage is expected to surge, according to a recent report by the U.S. Energy Administration. That is very bullish news for all oil company stocks.
This sector offers investors the opportunities to profit from prominent blue chips such as Exxon Mobil (NYSE: XOM) to promising small caps such as Americas Petrogas (TSX: BOE). Exxon Mobil and Americas Petrogas are working together in Argentina, far from the unrest in the Middle East. Americas Petrogas just received a very positive report about its shale resources in Argentina.
The income component of oil and gas companies also make for ideal long term holdings. ConocoPhillips (NYSE: COP), a favorite of legendary investor Warren Buffett, pays a 4.17% dividend. The average dividend yield for a member of the Standard & Poor’s 500 Index (NYSE: SPY) is around 2%. BP (NYSE: BP), the British oil giant, also has a very generous dividend of over 5%.
From Exxon Mobil to ConcoPhillips to Americas Petrogas, there are oil and gas stocks of all market capitalization that should make for profitable long term investments. The dividend paid by many provides for a steady, generally growing income stream. No one wants to profit from the misery of others, but oil and gas investments provide stability in a world that is anything but.
