Consumer spending is still quite low. Consumers are heavily indebted. Unemployment is rising. Thus economic earnings are set to continue to be mediocre. If inflation rises (likely because of dollar weakness and oil speculation), corporate earnings might be even weaker. However oil stocks are usually the last stocks to plunge during an inflation environment. Oil companies may profit if oil prices goes down, but gasoline and distillates don't drop as much (crack spread). So, oil stocks are a safer long-term bet than most other stocks?
I agree with you. Oil will rise eventually and stay high for quite some time. I think buying the indices will make the best bet. With the actual contracts worth more in a world that is oil hungry the index funds can offer minimum exposure. as the third world nations start to follow china and build build build then we will see more demand and since supply is constant then we know what the outcome will be.
What you mean by indices? Oil industry indices? Maybe oil ETFs? Or at least a basket of oil companies? (to diversify)
Thought about it and here is my take. If there is something like Peak oil, sure oil stocks are a good bet but.... Nationalisation of oil reserves could be the logical outcome and that leaves you where? It's a matter of national safety obviously. Do own COS.UN.