It is evident that the demand for oil is increasing with the passage of time while world oil reserves are continually decreasing. If you look at the current oil prices, it becomes clear why it shows an increasing trend. Therefore, if you logically assess the whole scenario, investing in the oil stocks can be considered as a profitable long term investment. Investing in the oil commodity market is always subject to high risk because it is a highly speculative market but if you invest carefully and wisely, you can actually earn long term benefits from your investments.

Today countries, such as Canada, Russia, Venezuela and Saudi Arabia have largest oil reserves. But due to the unstable government in Russia and political chaos in Venezuela, Canada and Saudi Arabia are considered are considered as the most reliable reserves in the global community. At any given time, oil commodity market holds about 7 to 8 million barrels of oil globally. It is usually in the form of oil stocks and these stocks are essential for smooth running of the operations of a global supply system.

The rail cars, tankers and the pipeline, all serve as the most efficient means to deliver the right product to a specific location at a right time and these resources are available to wider economies if an investor invests in the oil commodity market to help industries develop different means of transportation. However, it is important to seek guidance of Your Personal Financial Mentor when you are investing in the oil commodity market in order to decide what oil stocks are most profitable for investment. He can guide you professionally by analyzing the market trends and by assessing the overall impact of the economy on the oil prices.

The oil stocks give a clear indication related to the amount of oil traded in the market. If the oil stocks are low in a particular oil commodity market, the prices will be relatively higher and hence, it will reduce the demand for oil or it will encourage the extra supply of oil. Projected oil stocks are closely observed in the oil commodity market and are the prominent indicators that determine the oil prices. It has been observed that world oil stocks follow a seasonal trend. Declining trend is observed in the winters while rising trend is usually experienced in the spring. This is because of the fact that demands for oil is more seasonal than oil production.

Investing in the oil stocks can be challenging for investors but it also offers profitable long term results. Holding an oil stock can buffer your losses in time of supply disruption and according to experts, global oil production will continue to increase despite the global financial crisis. Investors should know that it is not easy to invest in the oil commodity market. They should devise a strategy in order to successfully add oil stocks in their portfolio and manage it in such a way that they earn healthy profits on their investment.

Categories: Oil Commodity Market