Hi,

It seems that since Oil is a finite commoditiy which we are using up at an alarming rate, unlike house prices, the price of oil can only go up (obviously there will be a few bumps in price but generally it can only go one way). With this in mind it makes a lot of sense to invest your money in oil.

What is the best way to do this? Buy shares in oil companies? Is this safe? Are there other reasons why investing in oil is not a good idea? Can you buy oil rather than a share in an oil company?

Thanks for your help.
Ben

Commodity futures market. Prices will fall back if oil production volumes are increased.

I see, but the production cannot be increase indefinately - as it's a limited resource eventually there will be none left. I suppose the problem is that it's a long term thing.

There might be more effort put into alternative technologies and energy sources. In the short to medium term production may be stepped up but yes in the long term the oil resource is limited but maybe alternatives maybe viable by then.

The oil industry doesn't seem to think so: futures prices for December 2011 are below $60.

In the long long term perhaps, but I'm not convinced oil is going to go up much higher in the next few years, absent another supply shock like Katrina.

Yeh I guess it depends on peak oil. Not a gamble worth taking i guess.