Retail gasoline prices in the United States have been rising since the beginning of the year and reached about $2.60 a gallon on average last week, nearly 40 cents more than in January. Economists are pretty 
sure the price will shoot up to $3.00 a gallon soon.
Oil prices have settled around $60 a barrel in recent months and members of the OPEC seem satisfied with that level. In 2006, OPEC which pumps about a third of the world’s crude oil cut its production levels twice to prevent prices from falling below $50 a barrel.
“We are watching developments on world stock markets to assess their possible impact on the global economy and, in particular, on energy demand,” said Mohamed bin Dhaen al-Hamli, OPEC’s president and the oil minister from the United Arab Emirates.
Consumers in developed countries can expect another summer of high gasoline prices and stiff energy bills with the solid demand for the black gold. On the other hand, consumers in “developing” countries such as Malaysia who created unsatisfaction amongst the people with the fuel-hike in 2006, any further hike will create dilemma to the government who is speculated to call for a snap election very soon.
Anyway, with such perception that the supply is tight, it’s only logical to look at the prospect of how to make money from energy-relaated stock counters.
Some of the oil-related stocks to be focused include:
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Transocean Inc. (NYSE: RIG, stock) – primary business is to contract these drilling rigs, related equipment and work crews primarily on a day-rate basis to drill oil and gas wells – specializes in sectors of the offshore drilling business with a focus on deepwater and harsh environment drilling services.
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Valero Energy Corporation (NYSE : VLO, quote) – owns and operates 18 refineries located in the United States, Canada and Aruba that produce refined products, such as reformulated gasoline (RFG), gasoline meeting the specifications of the California Air Resources Board (CARB), CARB diesel fuel, low-sulfur diesel fuel and oxygenates (liquid hydrocarbon compounds containing oxygen).
# TIP: If you decided to do option trading, remember to buy option with time-value of at least six-months expiration.
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March 16th, 2007 by financetwitter
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