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Moving from gold to oil

  1. xerxes_ph

    9,081 Posts.

    As much as I like the look of gold at the moment it may be prudent to have a look at oil stocks in the current global environment.

    It is always good to be ahead of the crowd when it comes to the "next sector to run".

    Oil, I believe, will too have its "day in the sun".

    Global reserves are dimishing .... and new discoveries will take years to push through to the production stage.

    With Bush's war on terror showing now sign of abating I think it is only a matter of time before the US attack on Iraq eventuates.

    How this will affect world oil supply is anyone's guess.

    What if terrorists block the vital Straits Of Hormoz and disrupt oil supply lines?

    There are a myraid of scenarios that could unfold to drive up oil prices in the Middle East.

    At best it will be a volatile oil market with explosive potential on the upside.

    How to profit from this scenario? As always the"majors" like Woodside and Santos stand to gain. Even if there is no major oil price spike, their production levels are set to increase dramatically by 2004/5 (maybe there will even be some short term weakness next year as current production tails off somewhat - but this would only be a temporary hiatus).

    One stock I like is NVS ... Novus Petroleum. It looks fantastic on the charts ... its making "higher highs and lower lows" ....and right now is at the bottom end of one of its 'lows". The longer it spends around its current trading range the more intense the breakout will be when (or should I say 'if" ) it occurs. I think it will push past $3.00 and make its holders a 30% gain in the not too distant future.

    NVS is a dividend paying stock ... it has an exciting and globally diverse exploration and drilling programme planned.

    For those who wish, this is one to look into.

    Best to anticipate trends and "get in before the crowd".

    Cheers.

    (Yep ... I hold WPL STO & NVS )

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