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Oil remains on the rise, as global economies around the world continue to stabilize. Investors looking for trends for 2012 need to look no further than the consistency found in China's rise as a budding economic superpower. As global growth continues to levitate the price of one of the most fundamentally sound commodities, Jeff Currie, head of commodities research for Goldman Sachs (GS), recently noted that "Within the next 12 to 18 months, China's going to surpass the United States as the biggest importer of oil in the world."

Such news can bode well for investors in domestic oil giants such as Exxon Mobil Corporation (XOM), Chevron Corporation (CVX), and Occidental Petroleum (OXY), who as of January 9, 2012 were already sporting market capitalizations of $409 Billion, $218 Billion, and $78.7 Billion respectively. A steadily rising demand for oil found in China growth will help support these oil exploration companies with rising oil prices. For investors looking for a steady return, regardless of share price fluctuations, domestic oil producers continue to pay steady dividends to shareholders. In the case of Exxon Mobil, Chevron, and Occidental, the current distributions reflect 2.2%, 3%, and 1.9% yields respectively. A clear picture can be seen in the following table.

Name Mkt. Cap. Tot. Cash Qtr. Growth% (yoy) Yield%
Exxon Mobil (XOM) $409 B $11 B 31% 2.2%
Chevron (CVX) $218 B $20 B 26% 3.0%
Occidental (OXY) $79 B $4 B 26% 1.9%

Yet while rising oil prices will continue to shift American investors towards safe domestic oil companies, some of the most directed growth of China's economic needs will surely land upon China's state-owned oil exploration companies. As a whole, the oil exploration industry in China is predominantly an oligopoly of three major oil companies: China National Petroleum, China Petroleum & Chemical Corp (SNP), and China National Offshore Oil Corp (CEO). China National Petroleum finds its access to American capital by the trading of its subsidiary PetroChina (PTR).

Name Mkt. Cap. Tot. Cash Qtr. Growth% (yoy) Yield%
PetroChina (PTR) $262 B $21 B 46% 3.3%
China Pet. & Chem. (SNP) $100 B $4 B 31% 2.4%
CNOOC (CEO) $88 B $12 B 51% 3.0%

A brief comparison of domestic U.S. explorers against the backdrop of such Chinese oil exploration companies clearly shows the rapid development of these Chinese producers. While continuing to reward patient shareholders with a steady dividend, the ongoing potential for rapid growth, and an advantageous macroeconomic picture, China's oil plays offer an opportunity to tap into one of the steadiest trends on the global market. Investors who find themselves overweight solely on domestic oil production may consider diversifying into one or some of the aforementioned Chinese companies.

Source: Now Is The Time To Diversify Into Chinese Oil