Buying Oil Future = Betting on Terrorism?

[FatalError]

Buying near term oil contracts now that it has plumeted from 70 to 52 seems like it could have a reasonable return if any of the escalations in iraq along with the iran sanctions causes to major disruption to oil and a price spike

given the political situation over there i don't see how there isn't going to be some kind of economic retribution at the least

[Epple]

If you have a read, go with it.

[otctrader]

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Buying near term oil contracts now that it has plumeted from 70 to 52 seems like it could have a reasonable return if any of the escalations in iraq along with the iran sanctions causes to major disruption to oil and a price spike

given the political situation over there i don't see how there isn't going to be some kind of economic retribution at the least

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Go for it.

Definitely compelling reasons to load up on crude oil between here and wherever it bottoms out in the $40's, although I would do it more so for longer term supply/demand considerations heading into the '07 hurricane season vs. speculating on an immediate term supply disruption this winter.

The big money will be made on the next (inevitable) ride to $70+ sometime later in '07 or early '08, and parking some cash in ~$50 crude makes for a nice hedge against Q4 stock profits.

[mark_foley]

I was going to start my own thread but this seems to be related. It seems to me that Bush is hellbent on going to war with Iran. What would be the best way to profit from this. The dollar would fall and crude oil would rise. Are gold and oil ETFs the best way to play this? Or would the big oil companies like Exxon be best? Is there any thing else I am missing?

[KDuff]

Buying a futures contract would be the riskiest way to approach your investment idea. Those contracts are actually 1,000 X Price because the contract is for 1,000 barrels.

You'd be better off buying an oil ETF if you think prices will rise in the short term. Don't forget that it is not uncommon for dozens of people to die in Iraq and for Iran to talk tough but the crude contracts don't react.

The supply side of the equation does not agree with your analysis. The most recent inventory report showed 3M+ barrel buildup.

[fire_fly]

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You'd be better off buying an oil ETF

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What is this and where can I find/buy it?

[crazy canuck]

So why would you think that geopolitical risk is not incorporated into the current price?

[Mediocre_Player]

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You'd be better off buying an oil ETF

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What is this and where can I find/buy it?

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Not selling/pimping, but start at www.ishares.com and look up their sector specific ETF's. I'm pretty sure they're not the only ones with an energy or oil&gas ETF.

As for an explanation of ETF's, search google. Off the top of my head, www.efficientmarket.ca is a good place for info.

[gonebroke2]

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You'd be better off buying an oil ETF

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What is this and where can I find/buy it?

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http://finance.yahoo.com/q?s=uso