Recently, I have been getting into investing and closely following the market trends for the price of oil. It is interesting to see how a hot commodity used for energy and transportation purposes reacts to
global markets and possibly make money off these trends.
Earlier this year in February, the price of oil hit its all time low at $27 per barrel and drove many small oil companies to bankruptcy. Since then, oil prices have rallied and returned to $40 a barrel. Previously, it was thought that oil will stay at all time lows because of the high supply of oil production coming from Iran, OPEC and shale oil. However, recent reports show that OPEC is getting ready to freeze production along with Russia and Kuwait on April 17th in Doha, Dubai. In addition, the U.S. inventory for oil decreased by 4.9 million barrels when it was expected to increase by 2.9 million barrels. The slowed demand and possible freezing of production is driving oil prices back up.
My recommendation is to closely watch the Doha meeting on the 17th. If there is an agreement to freeze production levels, we will definitely see a higher oil price. The best way to invest in rising oil prices is through Oil Exchange Traded Funds (ETFs) such as USO, UWTI, OIL, and UCO.
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