My opinion on personal finance news: oil and the stock market and you

Thank you. I have to assume that you are keeping up with "Peak Oil", and some experts believe the planet arrived there around 2006.

I sure hope so.

Thanks Jennifer.

I hope the stocks do, my 401K has taken a bit of a beating lately....

This seems to be a rather pathetic effort at an "article"; don't see what warrants having it featured.

Nevertheless, I'll add a few thoughts. I topped-off my gas tank yesterday, after hearing predictions on the local news that the big jump in oil prices would result in a fifteen cent increase in gas prices in the next few days. (The actual overnight increase was just a penny, but the worst, I'm sure, is yet to come.) I observed that the price had gone up twelve cents since the last time I bought gas, just five days ago.

Looks like that derisive cry from days of your when one of those new-fangled tin lizzies went chugging by--"Get a horse!"--might be a good idea. I may have to go out and do some shopping for a hay-burner this afternoon.

BTW, MM:MM, maybe you could explain the connection you seem to think exists between the price of oil and your advice to dial back use of natural gas???????

Whoops! Of course, the word I meant to use, above, was "yore". (Spank me, spank me!)

Hmmm, I see this article is featured on the Gather.com homepage. Must be a slow Gather news day.... Thanks for pointing that out Paul (who deserves a spanking any way you look at it). ; )

As to my natural gas reference, natural gas is a byproduct of petroleum fields. Interesting connection for sure.

Thanks for bringing up the Peak Oil theory Ron B. I do indeed subscribe to it, although I know of hundreds of fields around the U.S. alone that have yet to be drilled, with reasons ranging from the lack of oil company investment in the equipment needed to drill these fields to environmental concerns about the drilling impacts. The key, in my view, is to reduce my own dependence upon non-renewable fuels. Oil and natural gas are, in fact, the only fuels that don't renew once the fields are gone.

Thank you j - Frugal Mom, LaRue and John S. Here's keeping my fingers crossed for you!

There is one very obvious step that Congress could take to relieve the cost of fuel & help gas omissions too. It is a sure fire solution that could actually be done, legislated & put into effect very quickly & it would have an almost instant effect on the prices of nearly everything- bread, milk, gas- everything! We are being painted into a smaller & smaller corner, we HAVE to do something. The solution of which I speak?
Pass legislation that requires all big corporations (Wal-mart, Kmart, Sears, JC Penney, Dollar Stores, etc.) to transport via train instead of semi-trucks. This is more than a band-aide that would help for a while & fall off & be back where we were. It is a permanent help. It could be done quickly & it would help immediately & long term.
Such legislation would help every family in this country & the world itself. The drop in emissions of these semis alone should be incredible amount & immediate. It would crash the demand for crude oil in the USA. Which would crash the price of gas & diesel, greatly lowering the price of everything you & I buy. Part of the cost of everything we buy is affected by gas/diesel because it has to be transported to our given areas.
It's time to make them do whatever has to be done to stop this insanity. There is no shortage of oil, gas or diesel. There are rich oil/energy tycoons who want to be richer oil/energy tycoons. Then there is the rest of us. Who do you support?

"Oil and natural gas are, in fact, the only fuels that don't renew once the fields are gone." (?)

Hmm. It sort of annoys me when people make unthinking, uninformed, and/or illogical categorical statements like this while attempting to appear authoritative. Let's put on our thinking caps here, shall we boys and girls, and see if we can figure out what might be wrong with this one? (Hint: think about certain carboniferous deposits of the Paleozoic era)

Also, whereas oil and natural gas may have a few things in common the price of one has very little if anything to do with the price of the other.

Paul, I do feel like a nit whit. The moment I saw that you had pulled a quote from my post I realized that I had, of course, missed coal. In my fast response to you I was thinking only of water (that dam power), wind and solar -- all of which are renewable (or at least are expected to be).

I'm not a commodities trader nor am I an economist, so the price of oil or natural gas isn't something I normally follow. I've been dipping into coverage of this area, however, since the price of gasoline especially has been cutting into people's purse strings.

We do know that futures trading has been one of the reasons for the run-up in oil. But it's also a matter of supply and demand. The less the supply, the higher the demand, the greater the price -- whether talking about crude oil or any of its byproducts.

So, I hope you can cut me some slack on this one Paul G. I won't expect you to be perfect all of the time then either..... ; )

Incidentally, the only reason I posted this was to keep everyone apprised that the price of oil by the barrel had jumped to $139 per barrel, and that the stock market -- in what economists say is a response -- made the second-largest drop this year.

My goal with the rest of the text was simply to bring a simple "What could this news mean to me?" perspective to the issues. I'm apologetic that I appear to have goofed it up so royally.

EssDee C., you bring up an interesting argument here.

The passenger train system of Amtrak has long been in financial trouble, even with government assistance (here's a related story: Amtrak gets a boost from high fuel cost). I'm not sure what contracts it could negotiate to handle freight as well, but I'd love to see Amtrak remain solvent for sure.

Granted, passenger trains would then have to share the rails with a greater number of freight trains. And, in both cases, passenger and freight trains run on fuel too. It's diesel, mostly, but there have been a few electric trains rolled out by Amtrak of late.

Diesel, meanwhile, is the same fuel used by the trucks now criss-crossing our country bearing goods from afar. The analysis I'd like to see is a mile-by-mile comparison of fuel use via truck and via train. Please share if you have anything along those lines.

My advice: Buy some oil and natural gas stocks. Avoid refiners and retailers, look at Canadian energy trusts and smaller firms that have buyout potential.

It doesn't hurt as much when you have a finger in the pie.

I'll do an article on natural gas tomorrow when my brain has had some sleep. I'm learning a lot about this lately.

Thanks for the info!!

I appreciate the info. All your articles are really helpful!

RE: I'll do an article on natural gas tomorrow when my brain has had some sleep. I'm learning a lot about this lately.

That would be great Jane C.! I'll head over to your blog to check it out. Also, feel free to post a link here for those of us that want to learn more about this source of fuel.

Thanks Jo C., even though this post isn't up to my normal standards. It was just something dashed off. In any event, it's great to see your stoic face. ; )

RE: It doesn't hurt as much when you have a finger in the pie.

So true Carl. I'm competing in CNBC's Million Dollar Portfolio Challenge, and one of my five portfolios is called "Necessary Evils." It's compiled of stocks that produce products like beer and oil. Guess which one is running ahead of Blue Chip stocks and three of my other portolios? You guessed it, the one with the oil stocks. I don't know how much longer the oil stock "boom" will last however.... On the opposite spectrum, my green company portfolio is outpacing them all.

Yep - "have your finger in the pie' or 'if you can't beat 'em, join 'em
I'm long a coal company and a nat gas company.

... and so is everyone who owns a large cap or mid cap index fund, or has a pension, or an other kind of managed investment

Oh, and EssDee - most companies use rail when they can because its WAY cheaper than truck transport. Usually rail is onl practical in bringing product from the port or manufacturer to the distribution center. It has to go to the indivdiual stores by truck.

good article

Excellent perspective Pat. Thank you very much.

Congratulations on being featured on the Gather main page! Happy Triple points! I am visiting your content. So sorry for the generic post but this way I get to see more peoples content and help you get those points

No problem April. And thank you donna h. and April for the kind words.

Just an update:
I sold my positions in a nat gas company (CHK) and a coal company today (ACI).

I'm not saying that the energy section is done going up, but I think the easy money has been made for now. Time to take profits and step back and reassess.

Of course I reserve the right to change my mind at any time. The markets have been very choppy, and its hard to tell how much of today's price action was due to option expirations.