Big Oil Stocks Surge

Recent News

Mirroring the Internal Revenue Service Vehicle Tax Credit Program , Bank of America, (BAC) announced expansion of its $3000 reimbursement program to employees purchasing new hybrid vehicles to cover the entire U.S. and more than 185,000 employees, due in part to the success of its pilot program (instituted last June in Boston, Los Angeles and Charlotte). Read the full story here, as well as Bank Of America's Press Release.

Home

Ethanol-Biofuels

Big Oil Stocks Surge

Written by Miranda Marquit

Wednesday, 16 April 2008 12:06

Exxon Mobil (XOM) was back above $90 a share on Wednesday. Indeed, it appears to be heading toward $92 a share. And all of this thanks to the news that global oil supply is likely to cause problems. But XOM is not the only Big Oil stock on its way up. Conoco-Phillips (COP), Chevron (CVX), Royal Dutch Shell (RDS-B) and even BP (BP) all made gains on the stock market.

Photo:JAmes at 42, Creative Commons, Flickr

Despite record oil prices (which companies insist cost them money), Big Oil profits remain huge. Indeed, rising oil prices seem to do more to help Big Oil than hurt the industry. And if analysts are right, the ride should continue for oil companies. CTV.ca points this out about oil prices and supply:

'I think we're in for a new era in oil where higher prices are here to stay,' said John Stephenson, an oil industry analyst with First Asset Funds.

'We've seen 35 years go by without a major discovery in the oil patch anywhere in the globe.'

This means that as Asian continues to develop, especially in India and China where a rising middle class is interested in car ownership, oil supply will only become more restricted.

Tuesday, we saw what the mere mention of restricted supplies does to oil prices. And Wednesday on the stock market, we saw the result for Big Oil. The bottom line is this: As long as oil remains our primary source of fuel and energy, Big Oil companies will be just fine. No matter the rough patches the stock market hits. Over time, Big Oil is likely to rise consistently unless serious changes are made. And that means as a long-term investment Big Oil probably isn't a bad bet.

Disclosure: I own no Big Oil stock.

Site disclaimer.