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Investing in oil. There are several factors to consider before deciding whether investing in oil is a short term or long term investment. For example the situation as at August 2006 is that prices are running quite high due to the various Middle East problems. The judgement is whether this is as high as prices are likely to go for the immediate future. If yes, then it is worth a short-term investment. If no then it is not a good short-term

investment.

For the long term one has to look at the things that will affect oil prices. For example, very gradual upward changes in oil prices will create profits for the producers. It is good to have investment in oil at this time.

However there will come a time when that upward trend will affect the developed nations and, as a result of the inflation oil prices impact on, the economies of these nations will suffer. This will have the effect of them not buying so much oil, forcing the oil producers to lower prices. When that happens, the investment becomes less attractive.

For the really long term, within the next 50 years or so, it has to be remembered that oil is a finite product. World suppliers are already at the serious low-level status. Unless that situation changes, manufacturers and scientists are going to have to develop alternative sources of energy to take the place of oil, or at least significantly reduces it dominance of the energy market. When that happens, and it will, oil is not the place to have your investments.

Learn more about this author, Paul Lines.
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