Posts
As oil and gas prices increase to meet the ever-growing supply and demand of our world's economy. It is not different from the lucrative oil and gas investment opportunities within these sectors. The Organization of Petroleum Exporting Countries statistics stated that during 2008 the world's energy demands were within the vicinity of 86-87 million barrels per day, and have been increasing since the mid 2000's.
An investor looking for tax exempt direct exposure to the industry should consider an oil and gas unit investment trust. This would involve investing in either the production or the purchase of exploratory drilling assets and machineries. This usually provides a pass through treatment from petroleum investments and incomes. Mutual funds and future contracts are the most common investments in the oil industry.
Several investing opportunities are available in this ever-growing industry as there is an opportunity suitable for everyone, from the small shareholder to the big investor. One of the easiest methods of investment is purchasing stock in oil and drilling companies. Larger investors can use exchange-traded fund (ETF) to make direct investments on future contracts in the oil sector. Before investing, it is advised that a thorough research of the sector be carried out, and the services of an energy investment professional be employed.
What drives the world economy is basically oil and gas. There are many ways by which the products from gas and oil can be used, therefore, anything that happens within this sector has the power to change the direction of a country's economy.
Exploration opportunities involve companies leasing or buying land and prospect to make money through drilling. This is a risky investment as striking oil is not a guarantee. Income opportunities involve the acquisition of land or plots near proven energy reserves. Energy investments require certain services and support services, hence some opportunities come up such as transportation services; pipeline companies for the transportation of the drilled oil; other companies include the shipping and logistics companies manufacturers of equipment ;refiners; and rigging companies.
Previous trends have shown that when oil and gas prices rise the economy will slow down or become stagnant. Although investors are warned of this, they are also advised that large profits up to ten times the original investment amount are also quite possible. The oil and gas sector also has many tax advantages as most tax remains invisible to those purchasing shares from public traded stock.
When oil or gas is not found during drilling, huge losses can be suffered by investors due to the volatility of these sectors. Shares in smaller companies are harder to liquidate and usually require direct contact with the company. The use of a broker can incur commissions of more than 20% of liquidation funds received.
Another risk includes people risk. The professional ability of the explorer cannot be underestimated as the experience of the operator plays a key role in profit realization. There are mechanical risks, as the actual oil and gas exploration involve a lot of activities hence all the mechanical questions must be answered prior to the actual drilling. The reserve risk takes into consideration the well control and the seismic evaluation of the well. Finally, the commodity price risk must be catered for.
An investor looking for tax exempt direct exposure to the industry should consider an oil and gas unit investment trust. This would involve investing in either the production or the purchase of exploratory drilling assets and machineries. This usually provides a pass through treatment from petroleum investments and incomes. Mutual funds and future contracts are the most common investments in the oil industry.
Several investing opportunities are available in this ever-growing industry as there is an opportunity suitable for everyone, from the small shareholder to the big investor. One of the easiest methods of investment is purchasing stock in oil and drilling companies. Larger investors can use exchange-traded fund (ETF) to make direct investments on future contracts in the oil sector. Before investing, it is advised that a thorough research of the sector be carried out, and the services of an energy investment professional be employed.
What drives the world economy is basically oil and gas. There are many ways by which the products from gas and oil can be used, therefore, anything that happens within this sector has the power to change the direction of a country's economy.
Exploration opportunities involve companies leasing or buying land and prospect to make money through drilling. This is a risky investment as striking oil is not a guarantee. Income opportunities involve the acquisition of land or plots near proven energy reserves. Energy investments require certain services and support services, hence some opportunities come up such as transportation services; pipeline companies for the transportation of the drilled oil; other companies include the shipping and logistics companies manufacturers of equipment ;refiners; and rigging companies.
Previous trends have shown that when oil and gas prices rise the economy will slow down or become stagnant. Although investors are warned of this, they are also advised that large profits up to ten times the original investment amount are also quite possible. The oil and gas sector also has many tax advantages as most tax remains invisible to those purchasing shares from public traded stock.
When oil or gas is not found during drilling, huge losses can be suffered by investors due to the volatility of these sectors. Shares in smaller companies are harder to liquidate and usually require direct contact with the company. The use of a broker can incur commissions of more than 20% of liquidation funds received.
Another risk includes people risk. The professional ability of the explorer cannot be underestimated as the experience of the operator plays a key role in profit realization. There are mechanical risks, as the actual oil and gas exploration involve a lot of activities hence all the mechanical questions must be answered prior to the actual drilling. The reserve risk takes into consideration the well control and the seismic evaluation of the well. Finally, the commodity price risk must be catered for.
About the Author:
You can visit usenergyassets.net for more helpful information about Brief Introduction Of Oil And Gas Investment Opportunities.
No comments:
Post a Comment