You Can't Control Oil Prices, but You Can Control What You Do About Them
Oil and natural gas are not boring stocks and investors would do well to expect regular dramatic and swift price moves. There's not much investors can do about that; it's basically built into the commodity-driven sector.
What you can control is how you deal with the inherent volatility of energy prices. That means carefully considering what stocks you own. Here are some ways to think about energy investing so you know what you are getting into before the next big move in the sector gives you a fright.
The energy sector is broadly broken down into three segments: upstream (energy production), midstream (pipelines), and downstream (refining and chemicals). All three have different dynamics, but the upstream and downstream are both highly volatile with supply and demand and commodity prices driving revenue and profits. This is why conservative investors might want to start their energy search in the midstream.
Source Fool.com
