Oil and gas is one of the most important natural resources known to human being. For almost all the societies in the world, oil is the main resource which fuels their economies. The world consumes more than 85 millions barrels of oil everyday and so as their demands are doubling every year. Alongside these, with recession standing omni-present, prices are high in the market and many countries have been affected so far. Consequently, devaluation of the dollor occurs. And each time it falls, the price of the barrel rises and vice versa.
However in recent times, with the advancement of new technologies, drilling and oil extractions have been made quite cheaper and easier without employing more energy intensive processes. Oil prices are likely to remain around $110.10 a barrel and thus, investors now have exceptional opportunity to drive more advantages of such circumstances like higher oil prices, cheaper extraction techniques etc.
Additionally, after the Tax Reform Act of 1986, direct participation in oil and gas remain a good investment option which allows investors to shelter income. It further provides substantial tax benefits (tangible, intangible, percentage depletion allowance), which the government has designed to promote domestic drilling. So making this an ideal and profitable investment today, investors can deduct as much as 75 to 100 % of their investment within the first year even though the well is booming or not, 15% of your income is tax-free.
It’s also hugely important to know how to invest in oil and gas. You can either buy stocks of these companies or participate and purchase working interest in the drilling and several wells. So choose the best option which suits you and make sure that you go for reputable company. Moreover you can always start up with low initial investment having less risk involved and thereby you possibly stand a good chance to getting return on your investment.
Though there are some risks involved with such investments, the oil and gas industries have solid and provable history of being rather profitable. If you’ve enough money and looking for perfect resource to invest in, then investing in this industry is a wise decision.
Why Oil and Gas Industry is Better Investment Opportunity?