As the population of humans around the globe steadily rises, so does our need for and dependence upon energy. In fact, it’s predicted that the global energy need will increase greatly over the next twenty-five years. As such, now’s the time to invest in energy; there are fortunes to be made in oil, natural gas, solar, and wind energy. If you’re a first time investor or aren’t sure what type of energy you should be investing in, this article has you covered.
Investing in Oil and Natural Gas
A lot of factors influence the oil market and natural gas market, including the demand for oil, the world oil supply, the quality of oil, and speculation. Therefore, investing in oil can carry some risk, and it’s important to do your homework before investment. If you are interested in oil though, and invest wisely, the oil market can be very profitable. Here are some investment options available.
Stocks and Mutual Funds
One way to invest in oil and natural gas is simply to buy stocks in oil and gas companies that are expected to do well in the coming years. You can also look into mutual fund options, some of which are also investing in energy sources.
Exchange Traded Fund/Note
Considering Exchange Traded Funds or Exchange Traded Notes isn’t a bad idea. Exchange Traded Funds/Notes invest in oil company futures rather than just oil stocks. Additionally, Exchange Traded Funds and Notes can include many different products and materials, not just oil and gas.
Hydraulic fracturing is the process of injecting a combination of water and sand into rock for the purpose of creating fractures to allow oil and gas to flow more freely. Hydraulic fracturing is important for meeting the United States’ energy needs, as it’s predicted that hydraulic fracturing will by the sole determiner in the estimated figure of a growth rate of 2.6 million barrels per day between 2008 and 2019 in tight oil. Tight oil refers to petroleum that comes from shale or sandstone, and consists of crude oil. Many argue that without hydraulic fracturing, we wouldn’t have access to tight oil. There’s no straightforward way to invest in hydraulic fracturing. Instead, you can invest in companies who mine sand for the purpose of fracturing, ceramic proppant companies, or even used frac tanks and durable equipment that are required for getting the job done.
The market for wind power has recently experienced a bit of a lull—some are calling it a crash. However, wind power is expected to soar at a healthy rate in the future. If you’re thinking about investing in wind energy, keep your eyes on companies that are receiving a lot of turbine orders. Additionally, any sort of climate-change bill in Congress, if passed, could really put some air beneath the wings of the wind power industry. If this happens, expect stocks to rise steadily.
Installing solar panels in homes, businesses, and vehicles is all the rage as of late. Part of the explanation for the influx in solar energy can be attributed to the decline in the cost of equipment for solar energy in recent years. That being said, solar energy is very expensive, much more so than wind power. However, solar energy is expected to grow over the next few years in the US, China, Italy, France, and Japan. As such, investing in solar energy isn’t a bad idea.
Do a lot of research prior to an investment, and seek the consultation of an experience stockbroker if necessary.
This article was written by Richard Craft, an MBA student who hopes to help you manage your finances better. He recommends the use of Dragon Products, your number one choice when looking for the best quality equipment for all your energy acquisition needs. Check out their website today and see how they can help you!