All eyes are on the oil futures market today. As governments and industries across the globe adjust for drastically lower oil prices, investors are anxious to see how the crude market will react to the growing conflict in the Mid-East.

So far today, crude prices have jumped by near double-digit proportions, creating at least a temporary layer of support around the $40 per barrel level. As tensions increase along the Gaza Strip and Israel threatens with a strong and sustained ground attack, futures traders have all the ammunition they need to send prices higher… at least temporarily.

For fast-moving investors, the action has created a trading opportunity. Shares of the world’s largest oil producers opened higher thanks to a jump in crude prices. Exxon Mobil (NYSE:XOM) is up by just under two percent. Chevron (NYSE:CVX) and BP (NYSE:BP) are up by similar proportions.

A move of one

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Oil as a commodity is an interesting real asset. What investments most directly create the economic effect of owning oil itself?

The best answer would be to own an oil well, or better yet, own an entire oil exporting country.  However, neither of those options is a practical answer for most investors, certainly not owning a country (unless, of course you are born into the right family).

So what are the practical options for the rest of us?  Among others, they include:

futures contracts funds that invest in futures contracts exchange traded notes that are priced to a futures index royalty trusts that own oil in the ground integrated oil companies oil & gas exploration companies oil & gas production companies general energy funds alternate fuels options on any of the above.

Options are a speculation that expire in time, so we’ll exclude them from the “ownership” consideration.  Futures provide a 1:1 price participation, but they also expire with time, and rolling from

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div align="justify"A blind monkey throwing darts would beat the average investment bank oil analyst, whether forecasting weekly inventory levels or the future oil price. At the peak of the historic investment bubble in oil futures back in July, they were falling over themselves to predict $170-200 oil in 2009. Now it's $25. Everyone from central bankers to the CFTC and leading economists (or 'misleading' economists as people like Paul Krugman should be labelled) claimed the price was based on fundamentals. They were wrong then, and they'll be wrong again. Back in May in a href="http://deadcatsbouncing.blogspot.com/2008/05/its-oil-price-stupidbut-for-how-long.html"span style="color:#cc0000;"It's the Oil Price Stupid, But for How Long More?/span/a (and right through the July peak) I was resolutely contrarian and wrote: /divdiv align="justify"em'Far from worrying about $200 a barrel oil in the foreseeable future, I would stress test my portfolio for sub $100 oil, which is far more likely from these levels. At a ...

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Crude oil for December delivery declined 1.4% yesterday (Monday) with a 93-cent drop to close at $63.22 a barrel on the New York Mercantile Exchange. Oil futures are down 57% from the July 11 record of $147.27 and 31% down from a year ago, Bloomberg News reported.  “With all of the stock markets going down, there’s going to continue to be downward pressure,” said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. (MF) in New York. “There’s not a lot that can be done to stop this downward spiral right ...

In the energy market Monday, crude for November delivery tanked, closing at $87.81/barrel, down $6.07. November reformulated gasoline fell 16.9 cents, to $2.0591/gallon. Crude’s close was its lowest in 8 months, as the bears solidified control on fears the recession will be deep and global.

In the energy market Monday, crude for November delivery plunged, closing at $96.37/barrel, down $10.52 from Friday. November reformulated gasoline plummeted 25.4 cents, to $2.3615/gallon. The day’s action was pretty easy to interpret.

The failure of the proposed $700 billion U.S. bailout bill on Monday has caused oil prices to fall to $95.55 a barrel in Asia on Tuesday. Crude prices scheduled for delivery in November decreased $0.81 in electronic trading on the New York Mercantile Exchange in Singapore.

On Monday, oil prices dropped $10.52 in reaction to the U.S. economic situation. The day’s trading results were the largest percentage drop seen since 2001. In the last seven days, crude prices have plunged almost $25 per barrel, a 20% decrease. Even in London, November Brent crude was down to $93.42 a barrel, a $0.56 drop, on the ICE Futures exchange.

Oil was not the only item that fell in yesterday’s trading. The Dow Jones industrials ended the day with a 777 point reduction, which is the largest drop for a single day’s trading. The reaction on Wall Street was the result of the U.S.

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It seems the honeymoon might already be over. On Monday 09/22/08, stocks fell on concerns that the government plan to bailout financial companies, by buying up the bad mortgages and other assets weighing down their balance sheet, will not halt the downward spiral towards a worsening economy.

The plan which is estimated to cost at least $700 billion dollars caused the dollar to fall against major currencies. If implemented, the plan will drastically increase the liabilities of the U.S. government and that raises concerns amongst those who buy U.S. government bonds.

As a result, foreign investors are now worrying about whether the U.S. is the safest place for them to put their money.

With the drop in the dollar and the fact that Monday was an expiration day for oil futures, oil for November delivery, surged $16, closing at $109.37 on the futures markets. It was only last week that equity investors were celebrating oil

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Crude oil futures zoomed more than $16 a barrel yesterday (Monday) - and traded as high as $130 a barrel - thanks to a steep decline in the U.S. dollar and speculation that the Bush administration’s plan to bail out the financial sector might actually jump-start the U.S. economy. The record single-trading-session gain came on a day when CNNMoney.com republished a brand new Fortune magazine story in which author and noted "peak oil pundit" Matthew R. Simmons stated that crude prices were headed for $500 a barrel. At that price level, gasoline would cost more than $10 per gallon. Crude oil for October delivery soared $16.37 a barrel, or 15.7%, to close at $120.92 a barrel on the New York Mercantile Exchange (CME). The gain surpassed the previous price-gain record for a single day of $10.75, a move that occurred on June ...

The price of crude oil set a record of $147.27 a barrel on July 11, but the price has dropped significantly since then in the last two months. This week’s trading saw crude oil prices down nearly $40, or 27%, to $107.89 on Thursday. “With prices falling so rapidly, I think OPEC would like to protect that $100 price barrier,” stated Gavin Went of the research firm Fat Prophets in Sydney. OPEC is scheduled to meet next week in Vienna and may do just that. Prices are falling in other markets as well. In London, the ICE Futures exchange saw a drop of October Brent crude to $105.64 a barrel. Additionally, other Nymex trading saw heating oil futures drop 2.13 cents to $3.0024 a gallon and gasoline prices drop 1.3 cents to $2.7274 a gallon.

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