Why Invest in Oil and Gas?
Owning interests in fossil fuels such as oil and gas represents ownership in some of the most valuable commodities in the world. Oil and gas reserves are rapidly depleting throughout the world while global demand is increasing at an alarming rate. As such, the price of oil and gas will continue to increase as the daily global demand rises above the ability to produce daily supply needs.
Try as we may to develop alternative energy sources and curb our oil consumption, the cold hard fact remains that it takes oil to develop those alternatives and drive our society. Oil and gas are used for much more than just fuel. Plastics, computers, solar panels, ethanol, bio-diesel, hybrid vehicles and even the food we eat are all manufactured by the energy derived from oil. In the US we consume 10 calories of fossil fuels just to produce one calorie of food. It’s more evident in American society than anywhere else in the world; we are chained and bound to oil.
Oil and gas prices will continue to climb on an ever increasing upward slope due to global demand, production constraints, oil reserve depletion and economic dependence. One thing is for certain, without MAJOR new discoveries, it will be impossible to meet global oil demand within the next two decades. Oil is a limited natural resource, we only have so much and when it’s gone, it’s gone. The limited supply of oil and gas reserves combined with the fact that new discoveries have been diminishing for decades and global demand is growing at over 2% annually only further proves that prices for oil, gas and other fossil fuels will continue to increase proportionately.
In the recent past $100 oil was considered an unlikely possibility. We’ve already hit that benchmark and someday soon we will all consider $100 oil “cheap”. You can see the increases in energy costs first hand, just travel to your local gas station or open your utility bill. It’s not going to get any better anytime soon, you're going to have to continue paying an ever increasing premium price for oil, gas and energy. You can, however, be on the other side of the equation and enjoy huge profits from owning fossil fuels.
If you compare the financial performance of oil reserves against top blue chip stocks or other “solid investments” you’ll soon realize that oil outperforms the overwhelmingly vast majority by incredible amounts.
The best way to take advantage of high energy costs is to have direct ownership in fossil fuels. In this website we will outline ways in which an accredited investor can accomplish this goal.
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