"Syrian Premium" to Stay for Oil Stoc...
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Jonathan Yates
“Syrian Premium” to Stay for Oil Stocks, According to Expert

A recent article by Dr. Kent Moor, an energy expert, posits that the “Syrian Premium” is here to stay for oil prices.  The “Syrian Premium” is the increase in oil prices due to the tension currently in the Middle East.  If that proves to be true, that means that the price of oil stocks such as Exxon Mobil (NYSE: XOM), ConocoPhillips (NYSE: COP), Suncor Energy (NYSE: SU), and Chevron (NYSE: CVX) will remain high.

Many other articles on this site have stressed that oil stocks are compelling long term investments, including a recent piece on Suncor Energy.  These can be “Big Oil” such as Exxon Mobil or Chevron, or promising small cap firms such as Americas Petrogas (TSX: BOE) and Octagon 88 (OTCBB: OCTX).  Oil and natural gas have proven to be the most attractive fuel sources.

The chart below shows how the exchange traded fund for oil, United States Oil (NYSE: USO), has increased in recent market action due to the unrest in the Middle East as a result of the civil war in Syria.

When the price of oil is high, so are the shares of publicly traded oil and natural gas firms.

What will keep it high is increasing demand from the biggest economies.  Both the United States and China are starting to register better economic growth.  From that and increasing demand from other nations, the price of oil should remain at the current levels.  That is why legendary investor Warren Buffett owns millions of shares of ConocoPhillips and Suncor Energy.

Even without the imprimatur of Buffett, long term investors should be bullish on oil stocks.

No alternative fuel has come close to matching what oil and natural gas offer as an energy source.  There have been very promising developments for Octagon 88 and Americas Petrogas, which show clearly that small caps with can compete with “Big Oil.”  Americas Petrogas is operating in a joint venture in Argentina with Exxon Mobil, which is very impressive.  Factors such as these will continue the bull market for oil and natural gas firms.

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