The U.S. consumer remains in a precarious state. Wages are rising at a slow pace, keeping many workers from boosting their earning -- and spending -- power on an inflation-adjusted basis. In fact, consumers may start to feel that they are losing ground if gasoline prices hit $4 a gallon this spring, as many economists now expect. The price of West Texas Intermediate Crude (WTI), the benchmark for U.S. oil prices, has been surging lately, and seasonal effects imply "pain at the pump," come this spring.
I've been thinking about oil prices as I review the holdings in my $100,000 Real-Money Portfolio
. Stocks such as Ford (NYSE: F)
, Alcoa (NYSE: AA)
and Hasbro (NYSE: HAS)
could all be vulnerable to rising oil prices if consumers start to retrench.
To hedge against such a possibility, it's time to add exposure to crude oil. If prices do indeed rise, then an oil producer is likely to see its stock rise by a significant amount, as was the case in the oil "Super-Spike" of 2008.
Of course, I could simply look to acquire shares of an "oil major" such as ExxonMobil (NYSE: XOM)
or ConocoPhillips (NYSE: COP)
. But I've got my eye on an oil stock with potentially much more upside. Best of
David Sterman has worked as an investment analyst for nearly two decades. He is currently an analyst for StreetAuthority.com