How to Invest in Rising Oil Prices

For the less sophisticated investor, Lydon recommends ETFs that simply track indexes of oil production and services companies, such as iShares Dow Jones U.S. Oil & Gas Exploration & Production ETF (IEO), PowerShares Dynamic Oil & Gas Services (PXJ), and SPDR S&P Oil & Gas Equipment & Services ETF (XES). These ETFs invest in a handful of companies like Halliburton, Schlumberger, and Transocean. "Now with oil above $90 a barrel, and the global demand still strong, earnings should be very strong with these companies," Lydon says.

Corrected on 1/20/2011: In a previous version of this story the country Colombia was misspelled.

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