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by The Investment U Research Team
We don’t know if its scaremongering, boasting, gamesmanship or true prognostication, but this morning we’re looking at a couple of reports – One from Standard Bank Group on gold’s price future, and the other from Saudi Arabia warning of $200 oil prices.
Gold has been fluctuating – it’s currently at $950. And oil has been sitting around $60 a barrel. Oil looks to be the safer of the two bets here. Besides, we’d rather see the opportunity for a 230% return on oil than a 32% return from gold.
While the Saudi’s argue that oil’s price is going to rise because of the lack of investment in production, its pretty clear that oil’s price will rise because two big reasons.
We haven’t found a new energy source that’s economically feasible to quickly take the place of oil, and the supply of oil is finite. Nothing new, but it helps to be reminded of this.
If you look at any television screen over a 24-hour period, you’d think the entire world is already run on fuel-efficient vehicles, recycling plants, wind and solar power. The fact is: it’s run by coal, oil and gas. And nothing seems to be changing that anytime soon.
While there are lots of promising technologies coming down the pipelines, we’ve seen nothing that quickly – five to ten years – meets the needs of a voracious global consumer. Until that does, we should look to see fuel continue to be a hot topic, and a good investment.
It means that companies like BP plc ADR (NYSE: BP), Exxon Mobil (NYSE: XOM) and TOTAL S.A. ADR (NYSE: TOT) should all look for years of profits in the meantime.
Symbols mentioned in this article: BP, XOM and TOT
More on this topic (What's this?) Three Big Reasons Oil Prices Will Rally Back Big Time (Money Morning, 5/23/09)
"Sell Everything: Focus On Stocks And Bonds... Don't Forget Dollars... Oh Yeah, Buy Gold" (Zero Hedge, 5/21/09)
The S&P's Weight In Gold (Zero Hedge, 5/20/09)
We don’t know if its scaremongering, boasting, gamesmanship or true prognostication, but this morning we’re looking at a couple of reports – One from Standard Bank Group on gold’s price future, and the other from Saudi Arabia warning of $200 oil prices.
Gold has been fluctuating – it’s currently at $950. And oil has been sitting around $60 a barrel. Oil looks to be the safer of the two bets here. Besides, we’d rather see the opportunity for a 230% return on oil than a 32% return from gold.
While the Saudi’s argue that oil’s price is going to rise because of the lack of investment in production, its pretty clear that oil’s price will rise because two big reasons.
We haven’t found a new energy source that’s economically feasible to quickly take the place of oil, and the supply of oil is finite. Nothing new, but it helps to be reminded of this.
If you look at any television screen over a 24-hour period, you’d think the entire world is already run on fuel-efficient vehicles, recycling plants, wind and solar power. The fact is: it’s run by coal, oil and gas. And nothing seems to be changing that anytime soon.
While there are lots of promising technologies coming down the pipelines, we’ve seen nothing that quickly – five to ten years – meets the needs of a voracious global consumer. Until that does, we should look to see fuel continue to be a hot topic, and a good investment.
It means that companies like BP plc ADR (NYSE: BP), Exxon Mobil (NYSE: XOM) and TOTAL S.A. ADR (NYSE: TOT) should all look for years of profits in the meantime.
Symbols mentioned in this article: BP, XOM and TOT
More on this topic (What's this?) Three Big Reasons Oil Prices Will Rally Back Big Time (Money Morning, 5/23/09)
"Sell Everything: Focus On Stocks And Bonds... Don't Forget Dollars... Oh Yeah, Buy Gold" (Zero Hedge, 5/21/09)
The S&P's Weight In Gold (Zero Hedge, 5/20/09)