Benefit from falling oil prices

Oil prices have fallen sharply in recent weeks, which could mean less of a hit on motorists' pocketbooks during the summer driving season. The European debt crisis and growing oil stockpiles have pushed prices down to $70 a barrel, a decline of about $15 from recent highs.

This is good news for many of us. But if, like me, you believe that these lower prices are not here to stay, then it becomes wise to seek a hedge for the eventual return of higher prices. And the time to do that is now, when prices are depressed. 

One option is to invest in oil production -- my favorite choice right now is ExxonMobil (XOM). The world's largest oil company has seen its share price decline along with the price of oil, and on Friday it was flirting with its 52-week low. The company boasts a very reasonable 8.4 price-to-earnings ratio and a projected dividend yield of nearly 3 percent. As of this writing, ExxonMobil is at $60.88 a share. Morningstar.com, a site I use frequently, contends its fair value is $87 a share and gives the stock its highest five-star rating. 

The time to buy is when prices are low. Then, if oil prices start to rebound in a few months and our cost to fill up the tank starts to rise again, we can take solace in the increasing value of our stock portfolio. 

DISCLAIMER: Wendell the Pug owns Exxon-Mobile stock and recently added to his holdings. He is also a 2-year-old puppy.