Big Oil offers chances to make money through the Amex Oil Index. Even as other commodities pull back, Big Oil is moving forward. And one way to take advantage of price changes in Big Oil is to invest in in the Amex Oil Index (XOI). This is an index that looks to provide a mix of oil companies. Some of the Big Oil companies on the list include Exxon (XOM), BP (BP), Chevron (CVX), ConocoPhillips (COP), Total (TOT) and Occidental Petroleum (OXY), among others. If you are looking to tap into the big earnings from companies like Exxon, but also want to know that you are supporting companies that invest in renewable energy, you can have the best of both worlds when you look into the Amex Oil Index.
Unfortunately, the Amex Oil Index is expensive, trading at well above 1400. But the index has been moving steadily up, and with the current issues surrounding demand for oil, as well as concerns over the hurricane season, instability and fights with oil-rich Venezuela, oil is likely to remain moving steadily upward, especially as efforts to take government funding from Big Oil and give it to renewable energy development have stalled.
Here is what MarketWatch points out about the prospects of Big Oil:
The sector was getting a bit of a boost from a pre-market UBS note that raised its target prices on several of the big oil companies, citing a more bullish price forecast for the rest of the year as the catalyst. The broker now sees North Sea benchmark Brent crude averaging $67 a barrel for 2007, up from an earlier forecast of $60.
If you have the extra cash lying around, looking into the Amex Oil Index may not be a bad idea. If you are a little less flush, perhaps look into some of the companies that make up the Amex Oil Index. Dave Neubert points out that ConocoPhillips is great in terms of valuation, and companies like Exxon and BP are moving steadily upward.
Disclosure: The only company listed above that I am investing in is BP.