Good moment to invest in Oil?

[rikt]

Just like many people here I have some money I would like to invest at the moment and don't know where.

I'm seeing some news stating that oil prices will most likely continue to go up in the future. I have anso been reading some news about sanctions over Iran wich will probably increase oil prices soon. The possibility that US President Barack Obama may lose the presidentials next year and Republicans might win them also leaves me wondering how things would work out with Iran.

I'm guessing if I buy WTI or Brent now it might get a big increase soon anyway.

Any thoughts would be helpful. Thank you!

 

[Marc]

If it's publically available information in the media, why wouldn't the current price already reflect that?

If you said you had seen a top secret report which proved we were about to run out of oil then yes I would say invest in oil.

But why would you expect to profit from information that we all already have?

Investing in oil is a very bad idea extremely volatile no income better options available.

 

[rikt]

If it's publically available information in the media, why wouldn't the current price already reflect that?

If you said you had seen a top secret report which proved we were about to run out of oil then yes I would say invest in oil.

But why would you expect to profit from information that we all already have?

Investing in oil is a very bad idea extremely volatile no income better options available.

Hello and thank you for your input. I don't know anything about investing, so I'm trying to learn something about it.

You make a good point about the current prices being reflected by current news, however as I understood new sanctions are about to be applied to Iran's oil exports (approved 2nd December by the US senate). They are not active yet. When they are oil will go up. If you buy now and sell when the sanctions are applied will you not obtain a profit? You might know they will be applied now, but that won't be reflected in prices until the oil production/distribution is reduced later on, right?

Just asking.

 

[Scanner]

Hi Rikt,
The point Marc is making is still valid.

You are saying that because the sanctions are not active yet they have not reflected on the price of Oil, but that makes no sense when you think about it. If something is going to have an effect on the price of Oil and we know that to be true, then the price of Oil would reflect that now, and not wait.

For example, if we find out tomorrow that the supply of Oil will be cut by 50% on the 1st of January 2012 then the price of Oil will reflect that tomorrow, it wont wait till the 1st of January 2012 to reflect it.

See what I mean ?

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[rikt]

Hi Rikt,
The point Marc is making is still valid.

You are saying that because the sanctions are not active yet they have not reflected on the price of Oil, but that makes no sense when you think about it. If something is going to have an effect on the price of Oil and we know that to be true, then the price of Oil would reflect that now, and not wait.

For example, if we find out tomorrow that the supply of Oil will be cut by 50% on the 1st of January 2012 then the price of Oil will reflect that tomorrow, it wont wait till the 1st of January 2012 to reflect it.

See what I mean ?

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Hi and thanks for your reply!

Definitely! I agree with the prices changing on the spot according to the news.

What I meant was even though the prices are afected now, do you consider they will change even more when when sanctions take effect? Is there any margin for a further increase or not at all?

I'm guessing, by what you have refered, the prices increase now with the news because they are probably immediately recalculated as if there is an embargo going on already.

Thanks!

 

[Scanner]

Hi,

Its impossible to tell if the price will increase or not, nobody knows.... There may be an agreement for Saudi Arabia to increase output when the sanctions come into affect for example, so no change to supply.

You said in your original post that you had some money to "invest" but what you have suggested doing is to Speculate.

Rikt, You said you are trying to learn about investing in your original post, I would suggest you get your hands on a few books before you put your hard earned cash on the line.

Have a read of A Random Walk Down Wall Street and also The Intelligent Investor.
Mr Graham would be very cross with you for suggesting speculating on the price of Oil.

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[rikt]

Hi,

Its impossible to tell if the price will increase or not, nobody knows.... There may be an agreement for Saudi Arabia to increase output when the sanctions come into affect for example, so no change to supply.

You said in your original post that you had some money to "invest" but what you have suggested doing is to Speculate.

Rikt, You said you are trying to learn about investing in your original post, I would suggest you get your hands on a few books before you put your hard earned cash on the line.

Have a read of A Random Walk Down Wall Street and also The Intelligent Investor.
Mr Graham would be very cross with you for suggesting speculating on the price of Oil.

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You are right I was speculating, but right now it's pretty much all I could do.

Thank you for the book suggestion. I would like to read them, especially the second one.