Posted on: 10 October 2018Share
Most people who want to profit from crude oil and its many byproducts tend to buy a plot of land after scouting it out for crude oil potential and begin drilling for oil themselves. That tends to be a little more messy than most investors are looking for or even want. However, you can still invest in gas and crude oil without drilling for it yourself. Here is how it is done.
Back the Drilling Company
Drilling companies looking for crude oil inevitably find natural gas. There is almost always a layer of natural gas floating above a reservoir of crude oil. Most drilling companies attempt to harvest this gas while they drill through remaining rock to the oil below. Sometimes they have to be really careful with the drill so that they do not ignite the gas and cause an explosion. Still, if you decide to back the drilling company, you can do so in exchange for a percentage of the profits they acquire for the oil and gas that they find, harvest, and sell.
Invest in Stocks
Big-name gas companies trade publicly. You can invest in gas and oil by buying these company stocks. When the companies profit, so do you. However, you want to make sure you do not make gas and oil stocks a long term investment, since fossil fuels are finite, and not expected to last beyond fifty years from now. (If you are going to retire before then, invest all you want. If you are going to still be employed and working when fossil fuels run out, invest in gas and crude oil in another way.)
Gas Investments in the Form of Mutual Funds
Mutual funds are another option for investing in gas and crude oil. These investments are also low-risk, which means that when fossil fuels are clearly starting to run out, the holders of your mutual funds will swap out your "shares" of gas investments with something more lucrative and long-term. You can sell mutual funds investments or cash in whenever you would like, too, once they mature, and you are not wholly invested in any one gas and oil company, ever.
Futures look at placing profits from oil and gas exploration and sales into your pockets. There is just one catch; futures expire when future dates become present and past dates. You can invest this way, but you are going to really have to be on top of things to make sure your "future" investment does not expire in the past.