Oil arguably is the world’s most important source of energy. According to the experts of Kelcas Corporation (www.kelcas.com), when lifeblood of modern society combines with oil and gas, it makes more than half of the world’s energy. An integral source of energy in many industries. It provides fuels to vehicles and airplanes to carry people and commodities all over the world. Gas provides electricity, and also serving the purpose of cooking and heating energy. We use oil and gas for hundreds of things in a day and it has gained an important status in our daily lives.
Hence, investing in oil and gas can be very lucrative and there is a wide range of options and investor can enjoy the slice of the cake. Kelcas Corporation (www.kelcas.com), a renowned company exploring, oil & gas in Western Kentucky and Southern Indiana, and offering investors transparent and direct ownership in oil looked into the different ways to invest in oil and gas and the types. Let’s dig in!
Ways to Invest in Oil and Gas
1. Mutual Funds or ETF
Whether to diversify a portfolio or to serve as a hedge, ETF or mutual fund investment is the easiest form that makes you gain direct exposure to oil and gas investment. An investor can take advantage of owning multiple stocks without direct exposure to risk. Plus, there is no pressure on wealth as you can invest as little or as much as you can.
2. Oil Options and Futures
Experts sometimes see options and futures as a way to invest in oil and gas. It however, comes with a lot of risk as this way of investment does expire and it is highly volatile. Hence, not always a good option for beginners. This means it is important to have ample knowledge of investment in options and futures and have enough money to go with it.
3. Limited Partnership
For a more direct equity position in a company, consider a limited partnership that is mainly focused on oil and gas. Although publicly traded like a stock, this way of investment accords you the tax benefits of private ownership even if one is not actively involved in the company. This is a great option for investors seeking continuous cash flow although it is not as volatile as other commodities.
4. Owning Stock
Buying stock in an oil and gas company like Kelcas Corporation (www.kelcas.com) is another good way to invest with less risk. This might require the service of a broker who specializes in this niche to gain access to oil and gas investment. Some companies even allow you to buy a fraction of the shares without owning full shares. This means you can invest with a minimal amount.
Types of Oil and Gas Investment
The four main types of oil and gas investment include:
This type is characterized by high risk, high investment capital, extended duration of time, and being technologically intensive. This is a good option for risk-takers and its profitability depends on if the company strikes oil or not. Companies search the world for reservoirs and invest money in drilling to take advantage of the raw materials.
This investment type carries less risk as compared to exploration yet unsafe. With this, there is proof of oil reserves but there is no possibility that there will be a continual flow of oil. However, there is a probability that the investment will pay off in the long run.
For a long term passive income, high ROI potential, portfolio diversification, and less risk, this type of investment is one of the best options. It involves investing in companies such as Kelcas Corporation that boast of numerous oil reserves hence, less risk.
4. Services and Support
Although not as lucrative as others, investment in this type is safer. This type involves supporting the oil and gas industry with services such as transportation, construction, drilling equipment, and equipment, logistics, and many more.
To know more about investing in oil, check out Kelcas Corporation website, www.kelcas.com, consider various investment opportunities, and dive into the world of oil and gas investment.