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Oil Companies. Those two words spark outrage in every environmentalist, and for good reason: Big Oil is is probably among the meanest, leanest, and most efficient industries out there. From its beginning as Rockefeller's infamous "Standard Oil Company", through the fat years (pretty much all of the time) and the lean years (the occasional pesky anti-trust suit) they have been among the most profitable industries to invest in.

Since the time of the robber barons, the nature of the business has changed drastically. Many US oil fields have dried up, or are in the process of drying, and the Saudis/Iranians/Russians are beginning to flex their economic muscle. Knowing that there isn't a thing we can do about it, they've been jacking around the price of oil to maximize their own profits. But this doesn't change the fundamental reality that has been true since day one: the middle-man (Big Oil) can make a heap of money if a) the customers and producers are very, very far apart and b) if the customer wants the producers product very, very badly.

I can just hear you asking "but isn't this also true of other industries?". And the truth is, yes, it is. Oil happens to be in a unique situation in one regard, however, and that is the fact that it will eventually run out. So think back to your Microeconomics classes in college, and remember the relationship between price, the supply curve and the demand curve. When demand stays constant, and supply drops, price goes up. And with the price, profits rise until the very day the last oil well is empty.

For this reason I urge you to go out and invest in ExxonMobil (XOM) which happens to be the very most profitable company in the world. Or give Chevron (CVX) a try. It netted 24 billion dollars last year. Or you might consider BP (traded on the NYSE as "BP"), which came in third among major energy companies with 20 billion dollars of pure profit. I am confidant enough to say that knowing absolutely nothing else about these three companies, I would cheerfully invest my life's savings in them, given that they've turned a profit of 10 cents per dollar of revenue even during the worst economic crisis in two generations.

Taken all together, major energy and oil corporations are a safe bet now, and a safe bet for years to come. They're always highly profitable, so even during down years your investments can't go particularly sour. And during a booming economy with sky-rocketing prices for gas, diesel, aviation fuel, asphalt and other oil products? The sky is the limit. For long- or middle-term investors, there is no choice that can compare to an oil company.

Learn more about this author, Johnathan Deer.
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