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Saturday, January 5, 2013

Oil And Gas Investing Tips For Beginners

Investing in oil and gas is certainly very appealing to some investor. However, if you just started out, you might want to check out oil and gas investing tips for beginners. There are numerous tips found in books, articles, online and offline. It could be quite taxing. But a smart investor knows that to get lucrative returns, further researches are needed.
Here is some oil and gas investing tips that could help you get on the right track.

1. Understanding the oil and gas industry
There are many things that you could study on oil and gas industry. From the history to the methodologies of oil and gas research. However, as an investor you should focus on which oil markets you should participate in, active and stable regions, the companies that are involve and what kind of oil and gas investment you should go into.

Oil markets : Crude oil, natural gas, petroleum etc
Regions : United States, Canada, Russia, China etc
Companies : Exxon, Petronas, Breitling Oil and Gas etc
Types : Services and support, Buying or leasing, Developing companies, Exploration companies, Commodities etc

The more you understand about these the easier for you to make good judgment in your oil and gas investment.

2. Understanding the oil and gas market
Most would agree that in the best oil and gas investing tips for beginners, an investor should also understand the oil and gas markets. There are many given advice on this but I would suggest that you look into these four crucial key points.

Demand
When prices of oil increases, naturally demands would go down. However, in emerging markets like China, the demand steadily grows as industrialization increases. Though it seems to be a lot safer investing in United States or Canada, you might want to have a look at these emerging markets. However, you do need to look into certain aspect of the oil and industry markets of that region such as subsidies, taxation laws or other regulations especially on foreign investment.

Supply
Look into the increase or decline of oil and gas in that particular region. Mexico had been promising at one point but there is a steady decline of supply. You might also want to look at the exploration companies in these regions. If they are active, it might be still a good idea to hold into the oil and gas investments.

Quality
Quality oil and gas tends to pick higher price and have a good steady markets. Nigeria and African nation are known to be producing high quality oil and gas. In fact, much better that those produce by many Arab nations. You might also look into newer emerging markets such as Malaysia and Indonesia that produce higher quality oil and gas.

Speculation
Another force in driving oil prices are speculators who bids on future oil contracts. This is suitable for those looking into oil futures trading and reaping quick profit. However, if you are inexperience investor it can be disastrous. You might want to research more on oil and gas investment tips for beginners that focuses on speculations.

3. Choosing the right oil and gas investment companies.
If the oil market is too confusing for you, starts your investment with an experience oil and gas investment companies. They would provide better consultation and best solutions for your investment. Though you do need to pay extra for their service, it helps you to understand more investing in oil and gas markets. Make sure you did a research on the oil and gas investment companies. One with many professionals who had years of experience in the oil industry is a good point. However, this does not mean you should abandon any kind of oil and gas investment research at all. Learn to diversify your portfolio, learn about risk management and gain more experience so you could have more stability in your investment.

In a nutshell, as an investor you need to do quite a research on oil and gas investment. But make your own focus checklist so you won’t get sidetrack. In the end, the only thing that could make give you a good return is by putting your money in for investment. Hope this oil and gas investing tips for beginners could help you in making the best out of your investment.

2 comments:

  1. Bei der Wahl eines guten Ölgesellschaft ist es wichtig zu wissen, dass sie eine Gallone Öl zu kaufen zum gleichen Preis. Es spielt keine Rolle, wenn sie 10.000 Gallonen pro Jahr oder 10.000.000 Gallonen pro Jahr kaufen.

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  2. It's going to be interesting to see what will happen with the fall of fossil fuels within the next 50 years. We can't base our economy on a finite resource. The collapse is eminent if we don't come up with an alternate solution!
    Celine | http://pangeanenergy.com

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