Rising Oil Means Invest Small and Local

by The Investment U Research Team

After it’s recent run-up, oil has pulled back to just over $70. It’s moved the stock prices of a number of producers and distributors as the markets have churned recently. But even though it’s price has leveled off and supplies are relatively up and steady, oil is going to go back up.

As sure as we are that the sun will come up tomorrow, the taxman and death; oil is going back up. Quite simply, even with all of the action on alternative energy solutions, the world still runs on petroleum. And nothing seems to be changing that so far.

It’s a disturbing thought that some of the best alternatives to oil power are still years from mass production. Even worse is the number of products that we use every day that are made from petroleum byproducts.

It’s why smaller companies like Arena Resources (NYSE: ARD) and SandRidge Energy (NYSE: SD) will continue to be attractive as long as they can maximize the production of small oil deposits within the continental United States – right where the oil is needed.

These companies can pick and choose based on what the majors discard. It means their costs are lower and that they can withstand lower prices, longer, profitably. But they should have to wait too long…

As the prospects for an economic resurgence increase, oil and energy companies will rise on the expected need for their addictive products. It’s not the case now, but it will be.

Symbols mentioned in this article: ARD and SD.

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