Selasa, 17 Juni 2008

Investment Stock Energy

by Andri Faisal

We know the oil price has risen over many times. Today the oil price has reach to $ 140 per barrel whereas the early year oil price is only $ 100. Certainly, the great companies like Exxon Mobil, British Petroleum, Total Oil, and Petrobras have get profit over many times from oil sales. On the other hand, the consumer country has deficit budget. Moreover, the countries, which subsidize the oil price, like my country. They have no choice besides raising the oil price.

Today the oil is essential for the economic. Some country like China and India need oil in large quantity. They need more fuel to run their production machine. Meanwhile the politic condition of Middle East is uncertain. Iran has strong commitment to develop their nuke. They have larger oil reserves in the world. In Iraq, the company also threatened by struggler bomb. They could attack oil pipe or oil field anytime. The oil field damage could barrier the oil production so the oil price could rise over many times. Another producer country like Nigeria has bad politic condition too. The government opposite could attack the foreign oil field because they do not like the foreign oil company.

The change of regime could affect the oil prices too. In Bolivia, The foreign company has to improve the contract or they may out. Evo Morales, Bolivia President, force the oil foreign company to give higher return to Bolivia Government. Evo Morales want the fair cooperation with the oil company. In my country, the opposite government desire to improve the contract. The economic experts say that the oil company is not fair because the government just received little money. If many governments ask the fair cooperation, the oil company will get lower income. Certainly, the stock price will decrease.

We can see that the oil price will rise over many times. You could get high dividend too. When you decide to buy energy stock, you must realize that the stock has overvalued now. Since the oil price rise, other investor has bought the stock before. You should check the fundamental of the stock too. You should notice the potential well and the capacity of production. If the company has developed well, you can choose that stock. On the other hand, you should avoid the company, which have large depletion well. They could not raise their production and the stock will decrease soon.

I believe the blue chip company has large well so you do not have to worry. Alternatively, you can construct portfolio to reduce your risk. You should buy variety company stock.

About the Author

Andri Faisal is a financial consultant and live at Indonesia. My Blog

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