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How to Play $100-Per-Barrel Oil


Before oil hits triple digits, investors should consider Exxon Mobil, Chevron, and ConocoPhillips as these companies will print money at this price.

Editor's Note: This content was originally published on by Roger Nachman.

Oil looks like it's going to $100 per barrel. It's all but inevitable at this point, and it may happen sooner than any of us think -- especially now that China has decided to hold off on raising interest rates for now.

If that's the case, it may very well slow down the economy in the longer term, but for now, analysts see it as a sign of demand and that the global economy continues to strengthen.

Personally I'm a believer in commodities as opposed to fiat currencies as commodities actually have a value in society. Oil is used to heat homes, run cars, make plastics, etc. Copper is used for plumbing and in construction. You get the idea.

That's the point. Everyone else around the world does as well. So before oil hits triple digits, consider looking at the majors like Exxon Mobil (XOM), Chevron (CVX), and ConocoPhillips (COP) as these companies will print money at this price.

There are certain ETFs that will benefit from higher oil prices, like United States 12 Month Oil Fund, LP (USL), Oil Service HOLDRs ETF (OIH), and to a lesser extent United States Oil Fund LP ETF (USO).

With oil at $100 per barrel, the entire sector from the majors on down to the nuts-and-bolts guys (Schlumberger (SLB) and Halliburton (HAL)) will be flush with cash.

Black gold at $100 may very well lead the market to new highs in 2011, but where it takes us after that is anybody's guess.

Below, find some more great ETF and market content from Benzinga:

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No positions in stocks mentioned.

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