With so many investment vehicles available in the world today, it can be difficult to decide which represents the best option for you and your family. The decision is made much easier by familiarizing yourself with the distinct attributes of each one, and comparing these with what you’re willing to invest, and what you hope to get out of them.
A Commodity on the World Market
Oil and gas is a unique investment option because, as a commodity traded on the world market, it is directly tied to the economic growth of developing (major) nations—India and China are prime examples. Because of the ever-present nature of this kind of progress, oil investments tend to have a high potential for return-on-investment faster than other financial vehicles.
For several reasons – in particular, the advancement of technology to be discussed below – investing in oil and gas is quite attractive for the risk-averse. It’s a demonstrable fact that oil speculating is much more scientific than complex mathematical methods for stock investing, especially with the development of three-dimensional maps and GPS-enabled equipment that hone in on likely oil deposits.
Technology Ratchets Up Crude Oil Output
Several decades ago, America’s crude output peaked, and there was a lot of noise about just how bad the energy deficit would be by the 2000s. Fact is, the pace of technology—especially fracking, which is a technique for liberating previously hard-to-reach oil from deep inside the earth, but which is now economically feasible—has grown enough to make the homegrown oil outlook quite promising. The discovery of deposits like the $87 billion shale oil one in Texas is poised to encourage large industrial investments in petrochemical equipment throughout the coming decade. In fact, such companies may have trouble building the necessary refinement hubs quickly enough to keep up with the oil drilling rigs.
Steps To Consider before Pulling the Trigger
Many of the things to hash through are similar to what you’d work out before general stock marketing investing, but a few of them are exclusive to oil investing. For example, as you become more and more successful, applicable taxes can tend to pile up. It’s important that you find out whether these will come out of your share or the investor’s (the overseeing company).
Knowledge of pipeline location is crucial, to head off any coming developments that may halt continued construction, such as the passage of local laws, for example. As you would do with a financial advisor, learn about the operator and their experience in handling oil investments—they should additionally provide you with references upon request. Be wary of speculators that promote oil drilling in unknown regions, because the statistics show that success is limited to a one in ten chance that these produce enough to become lucrative for investors. These new potential wells are better left alone, in favor of established outfits that only target developmental land that already has a lot of data associated with it.
Lastly, there’s money in the post-process of oil refinement, and you can inquire about what happens once the well is dried up, or drilling has been halted for another reason. In many cases, you may be entitled to the proceeds of equipment that’s taken apart and sold.
This article was contributed on behalf of US Emerald Energy, your number one choice when looking to invest in oil.