When we talk about the oil industry, we are talking about one of the biggest industries in the world. More than 99 million barrels of oil are utilized daily. If we talk about production, we see that there is a whopping 4 billion metric tons of oil being produced annually from all over the world. The leading producers of oil in the world are the United States of America and Saudi Arabia. After these two, comes Russia. If we take into account other commodities, we see that there was more money spent on oil than all the other commodities put together like coal, iron, gold, and more.
Before you start thinking about investing in an oil company, you have to make sure that you do your research so that you are on the up and aware of what is going on and what you can actually do. There are various types of companies that you can invest in like drillers, refiners, and explorers. You could go for stocks, or you could invest in oil ETFs. If we speak of just oil, we see that there are various types of oils that we could invest in like palm oil, olive oil, and shale oil among others.
Who can invest in oil?
Is there a specific type of person or a company that can invest in oil? You could be an investor, a regular person with a job and a regular income, you could be a small business owner or an entrepreneur, and you can get into the oil investment game. One of the best ways that you can do that is to invest in oil stocks. This will make sure that you get the benefit when the prices rise. There are a lot of companies that have top stocks when it comes to oil, or you could go for oil ETFs. Suffice it to say that there is excellent oil investments opportunity for you if you know what you are doing.
One of the reasons why a lot of people are interested in investing in oil is the steady passive income that they can generate from oil stocks. Apart from the times when the market crashed, the investors who had a hand in the oil stocks were getting billions of dollars annually through various distributions and dividends. And they kept getting paid even after the crash. As most of our industries run on oil and we don’t have any replacements for it just yet, it is expected that the demand is going to continue swelling, and the time is good for investing in it.
Why invest in oil?
The oil industry is a rapidly growing industry, and there are various reasons for that. The first one is the sheer size of it. Another reason is that it is a very fertile one. Here are some of the reasons why investing in oil is financially beneficial for you and your business.
One of the major reasons why you should invest in oil is the rapid growth that the industry is seeing. According to experts, the total demand for oil is going to expand by more than 30 percent by the time we step into 2035. This means that the world will need more than around 100 million barrels of oil every day. There will be more than double the vehicles that we have right now.
You might think that buying stocks when they are low and selling them back when they are high is the only way of making money in the stock market, but that is not all. A lot of oil companies give out financially handsome dividends to their investors so that they can generate more income. This income is completely passive, and you don’t have to move a single muscle to get to it. Even in times of crisis, there were oil companies that were paying handsome dividend payouts to their investors.
Attractive tax incentives
As more and more investment is needed in the oil industry, the IRS provides a lot of tax incentives and other benefits to investors to encourage them to invest more in the domestic oil and gas companies. This way, you can enjoy a lot of tax incentives, and the best part is that you don’t even have to work for it. It is completely passive, and it is all yours.
The need of the hour
It is a fact that all the oil wells that were easy to explore and extract are fast depleting, and there’s nothing anyone can do about it. This means that more and more investment will be needed to explore more. More exploration will mean more technology and increased efforts. All of this means that this is a great time for you to go bullish on crude oil as a long term strategy.
The world’s population is continuously growing, and the more it grows the more power we need to make the world turn. As we still don’t have an alternative to oil and predictions are that we are not going to find a sustainable alternative in the near future, the demand for oil of different types is ever increasing. These are the reasons why investing in oil is a strategic option for you.