A few months ago (in fact until a few weeks ago) oil stocks were on a roll and one of the strongest performing sectors in the market. The recent downturn however absolutely crushed oil stocks so now could be a good time to consider investing in oil or oil stocks.
My favorite ways to play oil are using the Oil Stock ETF - XLE as it tends to outperform any of the oil futures based ETFs. If you are a long term investor it's tough to beat the performance you get from ETFs like XLE and XOP.
For short term trades I used to use the Crude Oil Futures but with all the volatility I'm not comfortable being in a trade without being at my desk. So now days I tend to use the 3x Leveraged Oil ETF (ERX) for bullish moves and ERY for bearish moves. These ETFs move dramatically just like the oil futures but since you purchase them as shares you can have much more control over your exposure compared to futures contracts.
The Bullish Percentage for Oil Stocks bottomed out at 2 (most bearish since 2008) and is just turning up so that's why it's a good time to look into oil for investment opportunities!
