fxtrader07

Investing in Oil Prices, Not Companies

'prices will remain high' - yes, most likely.
if they remain high - you will make zero money owning USO or crude futures. you will profit zero from peak oil.
great idea!

'Often companies will have other challenges such as increased royalty and taxes as oil prices rise. Companies will often face increased costs and have difficulty replenishing their reserves.'
that equals a lot of chances, mind you? you simply invest into cheap oil in the ground rather than buying the expensive oil that is being sold to the lemmings today. Buying good oil companies like COP or TOT or XOM means buying oil wholesale. Buying USO means you pay retail prices. Wow, great deal!
Owning producers of rare stuff that goes up in price ios smart in most cases. owning the stuff itself in the pure hope it will rise further - well, might pay off or might be dead money.

Consider thise: If oil (USO) stays flat for the next five years, at an average, the oil majors will make a ton of money. You will have made - ehm, zero.

What do you think, how high will oil go over the next 5 years? 200$? 300$? that would be just a 50%-130% What do you think will that mean to the profits of oil companies and their stock prices and dividends??
At 130$ crude many oil companies are pretty darn cheap and undervalued. of course, crude may fall in price. but then again, your investment in USO will not look so good either. while the oil majors still will make a ton of money. just a slightly smaller ton