Friday, 27 June 2014

Buying Into Black Gold, for the Long-Term

Oil As a Strategic Long Holding

Here are some reasons why I think that the Energy sector and Oil is still an excellent long-term investment theme for some time to come, with a couple of short-term drivers to drive oil-related commodity and share prices to boot...

1. Seasonal Effect - US Gasoline Prices Break Out For Summer (Driving Season)

Source: St. Louis Fed, Bloomberg

Energy: The Long-Term View

2. Long-Term Oil Driver: Consumption Growth from China, India etc.

3. So far, Non-OPEC (North America) Production Growth Has Kept Up

4. But Will Be Tough to Keep Up With Demand...

Energy: Short-Term Risks

5. Iraq, already OPEC's 2nd-Largest Producer, Is Forecast Huge Production Growth

6. With ISIS Advances, Iraqi Civilian Deaths Now Highest Since 2007

Investment Conclusions

7. Buy US Integrated Oil, Oil Services, MLP Stocks on Weakness
(JPMorgan MLP ETF: US code AMJ; 
iShares Oil Equipment & Services ETF: US code IEZ)

8. Buy US Oil, LNG Shipping On US Export Growth
(Guggenheim Shipping ETF: US code SEA; 
Teekay Corp. (US code: TK)


  1. The Oil Sector Remains A Key Long-Term Investment Theme
  2. World energy demand to grow fast
  3. Short-Term: Geopolitical Risks to OPEC Oil Production (Iraq)
  4. US, European Oil Stocks to Continue to Outperform
  5. The PowerShares DB Commodity Index ETF (US code DBC) one way to play higher Brent crude oil, gasoline prices.

1 comment:

  1. SPDR gold trust holdings gained by 5.68 tonnes i.e. 0.72% to 790.70 tonnes from 785.02 tonnes