What's the best way to make money on higher oil prices going forward?

Mutual funds and stocks of oil companies.
WG

futures options, if you end up being right, you could make ton of $$ rather quick...

Invest in wind and solar.

Don't invest in the oil.. invest in oil supply companies. The ones that build the rigs, pipelines, and other equipment. As reserves dwindle, more and more wells need to be drilled to try to keep the supply going.

I've been long oil and gas companies for a while. Getting ready to pair my positions back a bit though. Oil just missed $120 this week and though it might go higher it is pretty difficult to bet on that. I would look for individual oil and gas companies that appear to be undervalued based on their reserves. Gazprom and Lukoil are interesting since they seem to be priced well based on their reserves but there is probably a risk penalty associated with their being Russian companies.

Learn everything you can about energy companies. Read as many SEC annual reports as you can. Learn about crack spreads (refining margins) and what % of revenues for various companies typically come from refining. Oil is selling at a fantastic price right now but gas at the pump isn't high compared to the normal ratio so refiners are getting hurt. Also the higher the oil prices are the more companies want to drill so the cost of renting drilling equipment goes up squeezing profits some. There are just so many things to understand so do so.

Oil and Gas Journal is worth the subscription. Buy the book "Twilight in the Desert". Whether you agree or not with the premise you should understand the thesis. Also Boone Pickens book is pretty decent and he has a new one coming out. There's an old book by Kurt Wolff that you can still find that is very good as he details how to value oil and gas companies by discounting their reserves over a number of years. I think it is a late 80s book or something like that but still some good insights.

Stay out of the oil market, unless you're a professional investor and really know what you're doing. Oil is a bubble and when it pops, oil prices will pull back hard along with stock prices. Is there more upside to be had from current levels? Yes, but no one knows for how long. There are plenty of economic indicators which point to oil being a bubble. Explain all of them in detail, I will not.

However, take into account that oil prices have been skyrocketing along with alternative energy "solar" stocks. The fact that both are going up in parallel is contradictory. Either oil is a bubble, solar is a bubble, or both.

That's good advice, except that all of the oil suppliers and drillers are already up huge in the last 6 months. Especially, Transocean (Ticker symbol: RIG). Sheeesh, up nearly 100% in 12 months.