The Place to Be Is Energy

Higher oil prices are coming. The case for global growth and political turmoil is too compelling.

It probably comes as no surprise that the price of a share of stock in an oil company is closely tied to the price of a barrel of oil itself. For example, at the end of 1998, Occidental Petroleum(symbol OXY) traded at $6.47 a share, adjusted for splits. At the beginning of July, Oxy was at $59 -- roughly a ninefold increase. Over the same period, the global average price of crude oil, according to the Energy Information Administration, rose from $9.48 to $68, which means roughly a sevenfold increase.

Upside advantage

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James K. Glassman
Contributing Columnist, Kiplinger's Personal Finance
James K. Glassman is a visiting fellow at the American Enterprise Institute. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence.