In my case, I don't go out of my way to invest in oil assets because I work in the industry. It would be a bummer to lose my job and have the portfolio take a big hit at the same time for the same reason.
I do think that in the long-run it would be a good idea to own some major oil comanies provided they have a good balance sheet and good fundamentals including reserves
! We are still dependent on oil and as places like India and China continue to industrialize (although this has already happened to a large extent), demand for a dear commodity will increase.
Keep an eye on companies that have properties in northern Alberta in the oil sands, like Exxon-Mobil (AKA Imperial Oil) and Shell (especially Shell). As I have pointed out before, oil sands reserves are NOT counted as reserves by the SEC today (as I understand it). The story is that soon they may be. At this point, several of these companies will have a step increase in their reserves on the books. Remember that Shell had a scandal a year or two ago about inflating reserves figures. They had to restate them three times, I seem to recall, and their stock suffered. For this reason, I think Shell may be especially susceptible to a bounce in stock price when their reserves get a kick. (Disclaimer--I own no Shell stock. I have worked for Shell up here as a contractor, but not at the moment. I do not
have any inside information. All this is public knowledge. It just makes sense to me.) Be aware that at some point, the analysts will have built this expectation into the price. It may have happened already. Do your own homework.
If I were to buy an oil stock, it would be a major with a good balance sheet. But I don't buy individual stocks any more.
May the froth be with you.