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How To Invest In Oil As the year gets started, investors have realized themselves in a position they didn't expect. The United States. economy looks like it is expanding more than what most experts imagined. Its tough to say whether that growth will continue to increase in 2012. Nevertheless clues that the overall economy may be strengthening have increased oil prices already. That's partly because energy businesses often lead the way during expansions as more trucks loaded with items clog the freeways and more workers fill up their cars with gas on the way to their job. But don't run out and acquire giant energy company shares, ETF's or mutual funds from the likes of Exxon Mobil Corp or Chevron Corp yet because that's only just one way of the Four possible ways to invest in oil wells. And it traditionally will deliver [http://twitter.com/Deanavwn/status/183955985797353472 <nowiki>how to invest in oil royalties</nowiki>] you the smallest profits on your investment. The 4 Best ways To Invest In Oil And Gas 1) Oil Well Drilling (Domestic United States) 2) Oil and Gas Royalty Interests 3) Mineral Rights 4) Stocks, Mutual Funds or ETF's Why Global Tensions Are 'Good' For Gas and Oil Investments The price of oil is infamously not easy to foresee. Earthquakes, politics, and, increasingly, investors can affect oil prices without warning. That said, international concerns may very well send the price of oil higher for the short term. Oil prices are already over $100 a barrel, for a gain of just about $10 over a single week. Iran's first vice-president cautioned that the passage of crude will be stopped from the essential Strait of Hormuz in the Gulf if foreign sanctions are made on its oil exports. This uncertainty is keeping the oil market on edge. "Anything that happens that could lead to the closure of the (shipping lane) would be extremely bullish for oil," said Peter Beutel, president of Cameron Hanover, a consulting firm that is focused on energy risk management. More recent bombings in Iraq, at the same time, are elevating concerns about stability after the United States military services have withdrew. "There's no reassurance that something crazy won't happen there that sends... oil up to $150 or $200 a barrel," said Mike Breard, an energy analyst at Hodges Capital Management. Investors do not have to go too deeply into commodities to capture such gains. Abraham Bailin, an ETF analyst at Morningstar, states that although ETF's can generate unwanted tax liabilities. Scott Pasinski of Domestic Development out of Dallas Texas states, Investing in domestic oil wells is the smart answer, Its actually considered real property (real estate) via laws enacted by congress and the IRS used to stimulate domestic oil production. It not only provides a secure investment environment; it also provides investors a superior 85% to 100% tax write off, along with a documented 25% to 45% returns, annually. Gas and Oil Prices Relate To The United States Economy Europe's economic issues could keep a lid on oil costs. A number of euro zone countries are predicted to slide into economic downturn in 2012. And if one or much more countries abandon the European Union's single currency, the euro, the United States dollar would most likely move higher. Either could help mitigate the affect of oil prices for U.S. buyers. "A stronger dollar means that there will be more money in consumer's pockets," said Quincy Krosby, market strategist at Prudential. If a stronger dollar softens the impact of oil prices, organizations that focus on the U.S. domestic economy like retailers and auto makers ripe for out performance, she stated. Domestic oil drilling companies, which tend to be more immersed in the U.S. domestic market than the huge cap firms, would likely benefit most from a dollar's climb. The long Term View Of Investing In Oil and Gas As demand for oil grows and exploration becomes far more difficult, more investment dollars will circulate in to the enterprise of extracting crude oil. "We've found all the easy oil in the world," said Breard, the energy analyst at Hodges Capital Management. This is the dominant reason new technologies; such as fracking, horizontal drilling, deep drilling, 3-D/4-D seismic technologies are so crucial for oil revitalization. "Oil revitalization? Yes, oil revitalization", states Scott Pasinski of Domestic Development, "this is the process of rehabbing existing income producing domestic oil wells using superior technological advances and drilling methods. By working closely with our investors, our and veteran management is able to follow a 'franchise-like' formula and uncover the 10% of opportunities that offer extremely high ROI and a secure investment in an otherwise volatile world. We successfully rehab these under-performing and mismanaged opportunities into what we call, 'Superior Investor Grade Opportunities' cause they typically produce passive returns of 30%+". Drilling and service organizations are more inclined to gain from this move to harder-to-get oil than large energy businesses like Exxon because of a growing reliance on deep water drilling and fracking -- a process that uses high pressured liquids to extract oil from deep rock formations, says David K. Randall from Reuters. Drilling companies will still to benefit from an industry-wide update of rigs, many constructed Thirty or Forty years ago. "In almost every scenario, limited global supply growth will likely mean higher-for-longer oil prices," over the next five years, said Francisco Blanch, global investment strategist at Bank of American Merrill Lynch. "Oil is energy and we will always need energy, as well the incredible need for the 6,000+ products we use every day that are made from petroleum products, including everything made of plastics," adds Charley Havens CEO of Domestic Development. "It's a safe place to invest and returns average 25 to 45 percent, which is great for both monthly cash flow and retirement planning. We are also planning to hire about 300 people in the next few months, so when people invest in oil with a self-directed real estate IRA they are also investing in U.S. job growth."

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