November 26, 2006 – Every once in a while at the Underground Investor, we’ll revisit old blog posts just to remind our readers of particularly pertinent past posts. Most of the time, however, since they’re already posted, we’ll just leave it up to you the reader to search for them and read them. Back on October 30th, I mentioned that the oil services sector, due to the glut of capital that existed in big oil companies, would be a decent sector to consider investing in. I still believe that is true, particularly since oil prices are likely to rebound, further increasing the ability of big oil companies to significantly increase their CapEx spending in 2007.
Why do I believe that oil prices will rebound? If you’ve been reading my blog entries regularly then you know that I believe that oil and gas prices were artificially manipulated by the U.S .and Middle East governments as well as large financial firms in preparation for the mid-term elections in the United States. Well the strategy certainly helped stimulate the economy and stock markets as exactly I had predicted it would months prior to the mid-term elections. Now that the mid-term elections are over and these strategies failed to secure incumbent seats, business can return to normal again. This means a return to higher oil prices is most likely on the horizon and oil service sector stocks should continue to benefit in the future.
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J.S. Kim is the Founder and Managing Director of maalamalama, a comprehensive online investment course that uses novel, proprietary advanced wealth planning techniques and the long tail of investing to identify low-risk, high-reward investment opportunities that seek to return high double-digit and triple-digit returns.
