In 2015 according to PwC, 100 of the top revenue earning companies were in the oil and gas industry. In that year, these companies had a capitalization of $1.63 trillion. Those are quite interesting facts about the oil sector. Therefore, it is understandable if you would be interested in investing in an oil company.
For your guideline to making your oil investment choices, Alpha Seven Energy – Oil Investment Company presents the following:
Oil consumption and production is growing every day
Every day, 90 million barrels of oil are produced and used around the world. Statistical data from BP reviews and governments show that the production and consumption oil figures are growing by the day. The only concern is how to manage and utilize these resources to the benefit of everyone.
There is a shift in the production landscape
In the yester years, Oil Producing and Exporting Countries (OPEC) used to be the dominating force in this industry. However, in the recent year’s technology has shifted the balance and paved the way for oil sands and shale oil. Today, 60% of oil is produced by non-OPEC members. State owned companies hold the largest stake in the oil and gas industry, and for the first time, US has become the largest oil producing nation in the world. As you make your investment, these are some of the key aspects you must know.
Transportation forms an important aspect in the oil sector
In all areas of oil production, transport is a very vital component. In Europe, a big chunk of oil is transported via roads, while in the US they rely mostly on physical pipelines. In China, ships are the dominant mode of transport for oil. With this knowledge it means you may not have to directly invest in oil, but you can also do it indirectly like choosing to invest in transportation.
Oil trading is done electronically
The financial aspect of the oil industry is an interesting one. Most of the deals are done electronically. Investors make money through selling and buying contracts. Only BP still operates in all forms including physical monetary exchange and retail markets. This makes it one of the best companies for a beginner.
Oil prices are not really that low
For the last few years, a barrel of oil has traded at a constant price of $100 with a few shifts up and down. In the late 1990s and early 2000s, a barrel used to go for $40. Objectively, oil prices are not that low after all. The prices will always be dictated by the forces of supply and demand. But one thing is for sure; the prices will never dip lower than a few dollars. And that is why investing in this sector is a good move.
It is good time that you think seriously about investing in the oil industry. Despite a few lows here and there, the oil sector has been one of the most consistent sources of revenue for individual, private & public companies as well as many governments around the world. Your investment is guaranteed of making return even if you have to wait for years.