For the past month or so, oil has been moving higher and higher. It seems that so many people are infatuated with the actual stock prices, that many have forgotten that the price of oil was in the hundreds less than a year ago. While we are still nowhere near those highs, moves in oil are starting to steadily take shape and it seems like demand is just about to increase.
I could give the same old same old type of evidence why oil prices are heading higher. Summer time is coming and, while oil is heading higher, prices at the pump are nowhere near the $4+ they were last year; thus, gas stills seems relatively cheap to most. Demand will no doubt be more than last year. Seems like a no-brainer.
But I came across something a little bit more interesting. According to Barron’s, high-profile investor, George Soros, took a 5.4% stake in a company called Plains Exploration & Production Company (PXP).
What’s the significance? The company takes part in acquiring, developing, exploring and producing oil and gas properties primarily in the United States. Why would Soros consider taking up a position in the company if he was not expecting demand of oil to rise? As we saw last summer, the rise of oil leads to trying to find alternatives or increase exploration.
I am not saying many people couldn’t have predicted this, but I sure did. Just look at one my 4 stocks to buy in 2009. I am looking for Schlumberger Limited (SLB) to start to really kick in; however, PXP is not a bad play either. The stock looks to break a downtrend, with plenty of upside ahead.
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