According to some historians, the purpose of wars is to provide key people the opportunity to gain wealth from gun sales. These individuals often don’t care who wins the war and are as comfortable selling weapons to one side as to the other. Whether this is true, or not, is best left for time and historians to decide. The lesson that today’s investors, who likewise seek wealth, can learn from this scenario is that it isn’t necessary to directly participate in production to profit. This sound advice is taught by experts far and wide.
Take the production of shale oil and natural gas, as an example. The price of these commodities fluctuates as the result of both supply and demand and underlying political and economic events taking place around the world. These events include the actions, alliances and conflicts of other oil producing companies, new oil field discoveries, the rise of alternate fuels, and more. As a result of the long-term instability of oil prices, investors in oil and petroleum companies quickly discover that the value of their stock ebbs and flows on the tide of world events.
Fortunately, many investors have learned that they have other, more stable ways to make money from the current oil boom. Similar to the way that enterprising merchants made a fortune during the California Gold Rush by selling mining supplies to those rushing to search for gold, investors today can profit from the production of gas and oil by providing a service to those responsible for bringing it out of the ground. One such service is that of transportation. Once the oil is barrelled, it is transported to other locations. The primary means of achieving this are via pipeline, rail, and barge.
Pipelines are strained to the utmost and moving all the petroleum products possible. Rail transportation is expensive. Investors who have looked to barge companies as a means of transporting petroleum products are seeing a steady return on their investments. Regardless of their current price, these products must still be moved. Furthermore, because the future of affordable natural gas seems sure, more than $100 billion has been invested into the US chemical manufacturing industry, making certain the ongoing need for imported petroleum products.