Oil Prices Moving Higher Here’S One Way to Profit
Oil prices continue to be volatile as this commodity is not only affected by economic turmoil, but also geopolitical risks that are quite high. The large moves in West Texas Intermediate (WTI) oil prices, from a low of approximately $77.50 in late June to a recent price of $100.00, are a great example of massive volatility. Such moves in prices can cause havoc when an analyst or investor attempts to calculate what a company is worth. Firms in this sector take years to build and develop their properties and investment strategy, so the day-to-day fluctuations aren't as important as the long-term fundamentals of the project and prices. I would suggest looking at this sector from a longer-term perspective when it comes to formulating an investment strategy.
Oil prices will remain high for a long period of time for a number of reasons. Every year, the number of people driving increases as the world becomes more modernized; this creates an increased demand for fuel that drives oil prices higher. On top of this, there continue to be tensions in the Middle East. With the easy oil reserves already found, companies hoping to profit from higher oil prices are going deeper and deeper to find and extract oil.
Vantage Drilling Company (NYSE/VTG; AMEX/VTG; TSX/VTG) is an interesting company in this sector. The company takes advantage of oil prices by providing firms with offshore drilling rigs that are capable of working in water up to 10,000 feet deep. This is a relatively young company in this sector, starting in 2007, and it is still currently building its fleet of deep sea drillers.Demand for deep sea drilling rigs is quite high.
One of Vantage's platforms, the Aquamarine Driller, has had its option exercised by the current Malaysian customer until late 2013. This is yet another sign that demand will continue to drive Vantage's investment strategy of providing top-notch drilling vessels and taking advantage of high oil prices.The stock has been an exceptional performer this year, as prices have remained strong and demand continues to grow for its deep sea drilling rigs.
The company is still in expansion mode, so a lot of its funds are being used to expand its fleet. It appears that Vantage is in the right place at the right time with a solid investment strategy, as oil prices continue to move up and several new oil reserves have been found beneath the ocean. Considering its fleet is new and technologically advanced, I think this bodes well for an investment strategy looking out over the next decade.Penny Stock Detectives provides independent and unbiased research. We are not paid to write about the above companies we cover. We are independent analysts that love to research the stock market and comment on it.
Oil prices will remain high for a long period of time for a number of reasons. Every year, the number of people driving increases as the world becomes more modernized; this creates an increased demand for fuel that drives oil prices higher. On top of this, there continue to be tensions in the Middle East. With the easy oil reserves already found, companies hoping to profit from higher oil prices are going deeper and deeper to find and extract oil.
Vantage Drilling Company (NYSE/VTG; AMEX/VTG; TSX/VTG) is an interesting company in this sector. The company takes advantage of oil prices by providing firms with offshore drilling rigs that are capable of working in water up to 10,000 feet deep. This is a relatively young company in this sector, starting in 2007, and it is still currently building its fleet of deep sea drillers.Demand for deep sea drilling rigs is quite high.
One of Vantage's platforms, the Aquamarine Driller, has had its option exercised by the current Malaysian customer until late 2013. This is yet another sign that demand will continue to drive Vantage's investment strategy of providing top-notch drilling vessels and taking advantage of high oil prices.The stock has been an exceptional performer this year, as prices have remained strong and demand continues to grow for its deep sea drilling rigs.
The company is still in expansion mode, so a lot of its funds are being used to expand its fleet. It appears that Vantage is in the right place at the right time with a solid investment strategy, as oil prices continue to move up and several new oil reserves have been found beneath the ocean. Considering its fleet is new and technologically advanced, I think this bodes well for an investment strategy looking out over the next decade.Penny Stock Detectives provides independent and unbiased research. We are not paid to write about the above companies we cover. We are independent analysts that love to research the stock market and comment on it.
