Friday, March 17, 2006

When Oil Drops in Price - Stocks that Benefit

I am currently looking for stocks which will be a play on the fall in the price of oil. The type of companies that will benefit are the ones that use oil and gasoline as part of their business, and which is also a significant cost of either operations or cost of goods sold. For example, oil is used extensively in the plastics manufacturing industry. And plastic is used everywhere: the auto industry, the manufacturers of furniture, the high tech manufacturing industry (what is your printer made out of?, how about your monitor, keyboard, & mouse?), etc. Other industries that will benefit are the ones that use gasoline for fuel to run their operations. Examples would be airlines, trucking companies, utilities that utilize gasolene generators, etc. Other types of businesses that would benefit would be the owners of amusement parks (more customers are willing to drive, and airline prices may come down from reduced fuel costs so more may be willing to fly). The overnight shipping companies would also have reduced costs.

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