Oil stocks to invest in 2011

Oil stocks to invest in 2011 : People have made a fortune by trading in oil stocks. Possession of an oil stock means that you have a share of ownership in that particular oil company. With the prices of crude oil increasing, the oil stocks you purchase today can earn you handsome returns tomorrow. Oil companies are generally involved in the exploration and refining of the oil. Crude Oil is refined into fuel for consumption and in doing so they also recover kerosene and gasoline as by-products. The price of crude oil is generally market linked and so in case of a global crisis, the prices of oil will increase. Similarly, if any of the oil producing nations comes under attack then also the prices of crude oil increases in the market due to the supply chain being affected. In short, it can be said that the oil market pricing is driven by the supply in the market.

Big oil companies like Shell, Enron and BP have been posting huge profits year after year considering that the prices of crude oil has risen steeply in the market in the last couple of years. Investors holding the stocks of these companies involved in exploration and refining of petroleum products have seen their share prices increase in the past few years and not only that but they also regularly receive dividends.

So, how can one participate in the profits of these oil companies? The simplest way is to buy an oil well in the Middle East and ask these companies to drill the oil for you, but this is not feasible. Your best bet then is to pick up some oil stocks to invest in, considering that almost all of them are making profits. Do a market analysis and invest in the top performing stocks because you will definitely stand to benefits from the profit of these companies. Look out for stock of oil companies who are regularly giving dividends because it means that the company's balance sheet is healthy. Another way to invest in these oil companies is through the mutual funds route. This is good for those people who have a limited knowledge of the stock market and would like the fund manager to take the investment decisions on his behalf.

Want to see your money grow? I would suggest that you invest your money in stocks of oil companies because like gold, they are also likely to give you handsome returns in the future.

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