Photo:whatatravisty, Creative Commons, Flickr
Oil prices rise and oil stocks reap the benefits.
Big Oil was in a good place again on Tuesday on the stock market. MSNBC reports that oil stocks are making the best gains in trading:
Exxon Mobil Corp (XOM) was the top gainer on the Dow as supply disruptions around the world pushed crude futures up $2.60 to $98.10 a barrel. Shares of Chevron Corp (CVX), in their first day listed among the Dow Jones industrials, were the next biggest gainer on the average.
With oil prices heading up, oil stocks are likely to continue reaping the benefits. Continued hopes for the economic stimulus plan are allowing oil prices to keep moving toward $100 a barrel, and other problems in supply are also helping oil prices. An explosion at an oil refinery, as well as OPEC intentions to cut production, are all contributing to higher oil prices.
The current state of things serves to prove that it is hard to go wrong investing in Big Oil and oil services companies. As long as the world relies on oil for its primary source of energy, Big Oil stocks are unlikely to be a poor investment.
Disclosure: I do not invest in Big Oil.