Skip navigation
Oil Video Gallery
Singapore's UOB, and China's CCB and ICBC are among the best valued in the world, says Paul Schulte, managing director a...
With oil prices tracking all over the place last week, Peter McGuire, MD of Commodity Warrants Australia tells CNBC's Ka...
"What we have to bear in mind is oil's not necessarily being priced for today's conditions. It's being priced 6 to 9 to ...

Current DateTime: 08:50:03 05 Jul 2009
LinksList Documentid: 24355697
  • Collection of Michael Jackson

      Earlier this year, Jackson sought to auction his personal items. Although it never came through, here's a look at what was almost sold.

  • Recession-Resistant US Cities

      Some cities have been hit much harder than others during the recession. Here are the metro areas faring the best.

  • How Much For A T-Bone Steak?

      From the cost of a T-bone steak to a monthly phone bill, the price for everyday items can vary dramatically across the country.


Current DateTime: 08:50:03 05 Jul 2009
LinksList Documentid: 24890560
  • Boom, Bust and Blame

      The inside story of the economic crisis that has gripped the entire world.

  • E3: Gaming's Cutting Edge

      North America's premier computer and video game trade show draws tens of thousands of professionals to experience the future of interactive entertainment.

  • The Fall of GM

      A look into the fall of General Motors as the automaker heads toward bankruptcy and an effective nationalization.

By: Jeff Cox, , Special to CNBC.com | 18 Jun 2008 | 02:59 PM ET
Text Size

The seemingly endless surge in energy prices is lightening wallets at gas stations everywhere. But it's also a potential bonanza for investors who have a multitude of ways to play the astonishing bull market run.

CNBC

As analysts continue to debate whether there's an energy bubble, market pros aren't wasting their time. Instead, they're focusing on how to profit from the trend.

"There are so many excellent ways to play the energy market," says Jordan Kimmel, a hedge fund and mutual fund manager at Magnet Investment Group in Randolph, N.J. "Everyone keeps looking over their shoulder to figure out where the top of the market is going to be and not recognizing how deep this global explosion is. This is not a supply interruption increase, this is really demand-driven."

To be sure, there are plenty of risks in the strategy. Should the oil boom suddenly go bust that would spell trouble for a variety of investments. At the same time, if prices continue to rise that also would put pressure on major producers, as would the potential of windfall profits taxes that Congress continues to discuss.

As such, Kimmel is playing the energy market with diversification though a number of angles: Pipeline builders, natural gas suppliers and even alternative energy. Exploration companies have been popular among money managers, and President Bush's announcement Wednesday that he will encourage Congress to reverse a ban on offshore drilling likely will boost the industry.

Kimmel's plays include pipeline companies BP Prudhoe Bay Royalty Trust [BPT  Loading...      ()   ] and Persian Basin Royalty Trust [PBT  Loading...      ()   ]. Both pay solid dividends and, because they are focused on transporting fuel, are not subject to price fluctuations.

In natural gas, Kimmel recommends Contango Oil & Gas [MCF  Loading...      ()   ] and Warren Resources [WRES  Loading...      ()   ]. His top alternative energy play is Canadian Solar [CSIQ  Loading...      ()   ].

"Every guy's out there looking for the guy who's going to call the top," Kimmel says. "That's definitely not going to be me, and it's not going to be here."

Big Oil or No Big Oil?

Some investment advisors are staying away from the oil majors on the thinking that prices are too volatile and a big surge can have a negative impact on the major producers.

But Peter Miralles, president of Atlanta Wealth Consultants, is playing the entire sector and isn't afraid of stalwarts like BP [BP  Loading...      ()   ] and ConocoPhillips [COP  Loading...      ()   ].

"It's the same theme we've been on before--pretty much anything in energy. With prices where they are, they're going to continue to make a lot of money," Miralles says. "A 10 percent correction is nothing in the commodity area."

Elsewhere in the sector, Miralles likes companies that make the machinery and equipment used in petroleum, including National Oilwell [NOV  Loading...      ()   ], FMC Technologies [FTI  Loading...      ()   ] and Weatherford International [WFT  Loading...      ()   ].

He also is in coal, with recommendations for CONSOL Energy [CNX  Loading...      ()   ] and Massey Energy [MEE  Loading...      ()   ].

Natural gas also has the attention of John Massey, portfolio manager at AIG SunAmerica Asset Management, who believes a high trading ratio compared to gas, a warm summer trend and the possibility of a severe hurricane season as bullish factors.

In that industry he likes Ultra Petroleum [UPL  Loading...      ()   ], a company based in the Rocky Mountains that will benefit from the construction of a new pipeline that will greatly help with distribution.

Generally in energy, he recommends Schlumberger [SLB  Loading...      ()   ] for its big international base and ability to get into countries like Russia and Venezuela, which are more difficult places for US-owned companies.

And he says Cameron International [CAM  Loading...      ()   ] is a strong company for playing offshore and deep water drilling.

Tools:
Print EmailAdd This share icon


Current DateTime: 01:01:24 05 Jul 2009
LinksList Documentid: 29778428

Current DateTime: 01:24:58 05 Jul 2009
LinksList Documentid: 29779196

Current DateTime: 01:24:59 05 Jul 2009
LinksList Documentid: 29779199

Current DateTime: 01:01:20 05 Jul 2009
LinksList Documentid: 29779198
CNBCCNBC
About CNBC  |  Site Map  |  Privacy Policy  |  Terms of Service  |  Video Reprints  |  Advertise  |  Help  |  Contact
Partners: AOL Money  |  BloggingStocks.com
CNBC is a Division of NBC Universal
  Data is a real-time snapshot *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
Thomson ReutersThomson Reuters