Oil Prices Boil Down to Geopolitics

If you're trying to figure out whether oil stocks are worth buying now, you're better off watching CNN than looking at things like proven oil reserves. That's because geopolitics more than macro economics are likely to influence the price of crude, and therefore the shares of companies in the oil sector.

From a macroeconomic analysis, oil-sector stocks are attractive because their valuation, asset base, cash flow and earnings are relatively more visible than those of companies in most other sectors. The geopolitics, however, are a wild card. ...