Industry Insight: Energy's Money Machine

"Industry Insight" is a weekly series that examines sectors through what's known as the five forces of competition, which can help separate the winners from the losers. Come back every Monday at 6 a.m. to see which industries and companies will be put under review.

As the price of gasoline soared to more than $4 a gallon last summer, Exxon Mobil(XOM Quote) executives took heat for booking $14.8 billion in quarterly earnings. The company, whose annual revenue exceeds the gross domestic product of countries including Belgium and Switzerland, is so profitable not only because of high energy prices, but due to competitive forces that act upon the oil and gas industry. In a way, Exxon Mobil can't help but be so successful.

Thirty years ago, Michael Porter of the Harvard Business School in Boston famously described five forces that influence competition. The energy industry enjoys a mostly positive mix of these forces. As a result, investors should consider the oil and gas sector as an attractive long-term investment and disregard volatile energy prices. In addition to Exxon Mobil, Chevron(CVX Quote), BP(BP Quote) and ConocoPhillips(COP Quote) also are beneficiaries of these forces. ...