Stick With Quality in Volatile Oil Market

Article Excerpt

Oil prices rose to close to $80 U.S. a barrel last summer, mainly due to tensions in the Mideast. But the price has dropped to below $60, as the slowdown in the United States economy cut demand and raised inventories. We’ve probably hit a new high plateau for oil prices, between $40 and $80. We feel conservative investors should have only modest commitments in oil and gas stocks. They should focus on well-established companies, such as these three. Their large reserves and diversified operations will let them profit from higher prices, and help shield them from the inevitable downturns. IMPERIAL OIL LTD. $42 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; SI Rating: Average) is Canada’s largest oil company, with major operations in Alberta and the Northwest Territories. Oil accounts for over 70% of its production, while natural gas supplies the other 30%. Imperial also refines crude oil into gasoline and other petrochemicals, and operates over 2,000 gas stations under the “Esso”…

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