Kevin Stecyk

Investing in Oil Prices, Not Companies

Actually, there are several threats to owning companies. One, ability to replenish reserves. Two, increased royalties. Three, more hostile governments around the globe. Four, carbon taxes levied against oil companies. Five, windfall tax, which you mentioned. Six, poor management. And I am sure that there are more.

If oil prices spike to $200 or even $250, you'll see a nice rise in USO. I am not so sure about the stocks you mentioned.

And if prices do rise to $250, I doubt prices will be sustained immediately. That is, oil prices might spike to $250 and then fall back as the world adjusts. From there, who knows.

If you read my article *carefully,* I did not advocate against oil companies. I own shares in several myself. What I did say was to *consider* owning USO.

Investing in Oil Prices, Not Companies

I see no contradiction. Whatever.

Investing in Oil Prices, Not Companies

Here's a Yahoo chart of USO, TOT, COP, XOM for the past year:

tinyurl.com/59txhg