Why Oil Stocks May be Good for Your Portfolio

Stock markets love a consensus, but the oil market is one wherereaching any type of consensus is very hard to achieve. There ismuch battle going about oil stocks and related issues. Someexpect stocks and bonds for oil and various petroleum productsto keep rising. Some expect them to peak soon. Others expectthem to go down in the not-so near future, but downnevertheless. So, who to listen to? Regarding oil stocks, a fundamental that has to be understoodabout the oil market is that is it driven by the market laws ofdemand and supply. Demand for oil is on the increase slope.Economic recovery by major world players means that there ismore demand for oil. Other emerging big players, like China, arein more and more need of oil, thus raising demand. Countrieslike China, India and South Korea are also into building theirown oil reserves in prediction for increased need in their owneconomy. This in turn, leads to an increase in demand. However,while supply of oil is still satisfactory, it is however to benoted that there is a tightening of supply on the market. Addedto this is the fact that experts are remarking that oil suppliesare dwindling. Combined with the other pertinent fact that thereis an absence of supply growth, it all leads to imply thatsupply may not be able to meet the requirements of demand in thefuture. Since the price mechanism is determined by these market laws,what happens when demand exceeds supply? Prices go up. Needlessto say, increasing prices mean increase in value of oil stocks.This is why it is a good idea to hold on to those stocks. A number of stock investment and stock broking companies provideadvice and handling of stocks portfolios. These qualifiedcompanies thus look into the screening, research, and analysisneeded to ensure the best oil investment for one's portfolio andneeds. However, in recent times, and especially due to theInternet, the layman can also attempt to invest on his own inoil stocks. Use of tools such as specialized web sites andbusiness search trackers on the Web allow for screening andanalysis of major market players. However, there is not much ofa security net when one uses one's own counsel for investment.Careful analysis and diligence is thus the key for thesetransactions.