Playing oil without a commodities account
Trading oil often requires a high level trading account in either the futures market or with a commodity trading firm. There are a few stock sectors that move in reaction to oil prices. Trading these stocks, in many cases, is just as good as trading oil itself.
Exxon Mobil is a great place to start. When oil prices rise, so do the profits of Exxon Mobil. Minus any government intervention or higher taxation, Exxon Mobil can capitalize on the rising prices of oil. The stock trades at a market cap of $500 billion so there won’t be any wild movements in stock price
Airlines represent another sector with exposure to the price of oil. Airlines are experiencing huge losses and consolidation so they aren’t the best for an oil play, but if the companies sort out their troubles the stock should move contrary to the price of oil.
Delivery companies such as UPS and Fedex are perfect for an anti-oil play. When oil prices drop, the earnings of these two companies should rise. High oil prices are starting to be priced in to the price of sending a package, thus when the price of oil drops earnings should explode. UPS and Fedex have lost plenty of market capitalization due solely to rising energy prices. If you think oil is moving south, these are the perfect investment.
Oil prices are unlikely to fall, but theres plenty of room for either Exxon Mobil or companies like UPS and Fedex to move. These three companies have the most exposure to oil without outside influence. Neither of these three are unprofitable and all of them are affected by oil movements.
Oil and metals will continue to do well. However at the moment both seem to have reached a temporary top at the moment. Metal juniors are still very undervalued now and nice buying opportunities are here now!