Crude oil is one of the most popular commodities that offer investors many opportunities. The commodity is the primary source of energy, meaning that its presence in all regions globally isn’t going away anytime soon. While investing in oil can be lucrative, the asset is volatile and carries equal risks. That is why it is advisable that you understand how to invest in oil before making your first significant investment.
Learning the different methods of investing in crude oil will prepare you in making proper decisions when the right time comes. This means taking the necessary measures to mitigate trading risks and maximising the potential for returns. Fortunately, we have prepared this comprehensive guide to show you how to invest in oil using an online brokerage firm. It is our hope that by the time you finish reading, you will be fully prepared to make your first investment.
Top Brokers for Investing in Oil
As part of our standard procedure, we usually recommend the best brokers to help our readers get off their trading and investment ventures to a good start. Below are the top brokers to help you get started.
Note that we have thoroughly tested and reviewed these brokers, meaning they are safe and host all the necessary tools to support your investment activities. The brokers allow you to invest in oil using different methods such as stocks, ETFs, futures contracts, CFDs, and mutual funds.
1. Plus500
*Illustrative prices
Plus500 requires a minimum deposit of £100 to trade crude oil as CFDs. Trading crude oil is commission-free with low spreads. Simply put, Plus500 is one of the low-cost brokers in the UK, and we primarily recommend it to traders on a low budget. When using Plus500 you will be supported with excellent resources for research and market analysis.
On the flipside. Plus500 has a single proprietary platform, limiting traders looking for more advanced resources. The broker also charges different fees, including overnight fees, inactivity fees, conversion fees, and other types.
✔ Regulated in many countries
Note: 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
2. eToro
eToro offers diverse trading opportunities, and besides investing in crude oil, the broker allows you to venture into currencies, cryptos, and more. All these assets are offered on a user-friendly platform that hosts impeccable resources for market analysis and skills development.
The broker has a minimum deposit of $100 and allows you to buy oil as stock in various companies. Stock trading with eToro is commission-free, and you can also trade oil as CFDs, ETFs, indices, and futures contracts. In addition, eToro offers the best social and copy trading platform for traders and investors to learn from experienced investors and mirror trades with profit potential.
Unfortunately, the broker’s spreads are relatively high, and you will have to pay fees for withdrawing funds. On top of that, the copy trading platform is relatively expensive to access, limiting low-budget investors.
Disclaimer: eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. {etoroCFDrisk}% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Zero commission means that no broker fee will be charged when opening or closing the position and does not apply to short or leveraged positions. Other fees apply including FX fees on non-USD deposits and withdrawals. Your capital is at risk. For more information, click here.
✔Low minimum to fund an account and begin investing
How to Buy Oil Stock With eToro
Whereas there are other methods of investing in crude oil, buying the commodity as stock from various companies has become popular among investors. Keep in mind that the procedure for purchasing stock using our recommended brokers above is straightforward. All you have to do is understand the processes involved.
In this regard, here is the step by step procedure for buying oil stock with eToro.
Oil stock is listed in various exchanges, and you need to create an investment account with eToro to buy the stock. Therefore, visit the broker’s website by clicking on the links we’ve shared on this page. Since eToro has a reliable trading app, it is also advisable to install it on your mobile device to manage your oil investments on the go.
Note that eToro has strict and legally regulated terms and conditions. While most traders will overlook this element, it is crucial that you understand it fully and agree to it before making a commitment with eToro.
Creating a share dealing account with eToro to buy oil stock usually takes a few minutes. All the broker requires is for you to create a username and password. And you will be asked to share your personal information, including name, email, phone number, income details, location, and more.
Basic knowledge tests are meant to determine the best trading package for traders based on their skills and levels of experience in the trading and investment industry. In this regard, you will be required by eToro to complete this test and get the best trading package. In addition, there is a margin trading test that determines your leverage limit since trading on leverage can bring about huge losses.
eToro is an FCA regulated broker, and as such, it has to follow all regulations as stipulated by the authority. One of the standard procedures for all FCA regulated brokers is to ensure all traders verify their identities before buying oil stock. In this regard, you will share a copy of your ID card or passport. eToro requires you to verify your location by providing a recent utility bill or bank statement.
Once you have your trading account fully activated, you will make a deposit of at least $100 per eToro’s requirements. Fortunately, making deposits with this broker is free*, so you won’t have to worry about transaction charges. You will then access the exchanges where oil stocks are listed to complete your purchase.
Besides buying oil stock, you can trade the asset as CFDs, where you only speculate on its price movement and earn from rising or falling prices. eToro allows trading of oil stocks as indices, which are instruments that track a basket of stocks.
*A conversion fee may be applied as withdrawals and deposits are conducted in USD. Any other currency will have to be converted.
Tips on How to Choose the Best Stock Broker to Invest in Oil
Trading commodities carries risks such as market volatility, leveraged positions, and the potential for substantial losses. To manage these risks, diversify your investments, use stop-loss and take-profit orders, and trade with funds you can afford to lose. Additionally, stay informed about market factors, adhere to a well-defined trading plan, and guard against emotional decision-making.
It is also crucial to comply with market regulations and be cautious of counterparty risk. Regularly reassessing your risk tolerance and trading strategies will help you trade responsibly and maximise profitability.
The best stock broker to invest in oil should meet all your investment needs. This means that you shouldn’t consider a broker based on what other traders say but look at their features and see if they match what you need to invest. Note that the procedure of finding the best stock broker can be lengthy, and we advise you to take your time and leave no table unturned until you are fully satisfied.
Here are the significant elements to guide you in choosing the best stock broker to invest in oil.
The best stock broker to buy oil stock should be licensed and regulated by the Financial Conduct Authority (FCA). Settling for unregulated brokers is a risky move that can make you lose your hard-earned money to fraudsters who have dominated the online trading market.
So, buy oil stock using FCA regulated brokers and benefit from secure platforms where your funds are secured in a segregated account. It will also be easier for you to take legal action against an FCA regulated broker in case of a conflict.
Buying oil stock can either bring about profits or losses, and it is crucial that you choose a broker you can afford. Do not invest money that you cannot afford to lose. Instead, have a budget and let it guide you in choosing a broker by considering commissions or spreads, deposits and withdrawals, minimum deposit requirement, and more.
The stock broker for buying oil stock should be available anytime you feel like trading. This is because it is usually impossible to stick to your desktop throughout the day and manage your activities. That is why we advise you to settle for a broker with a trading app that you can use to manage your oil stock investments whenever you step out of your working station.
It is crucial that you find a broker with a platform that will make you feel comfortable. For this reason, find a broker with a demo account and sign up to test its platform’s performance. Note that the platform should host all the necessary tools to support your oil investment activities.
A broker’s customer service should be reliable by having good representatives to turn to in case of any challenges. Whether you are a beginner or expert trader, ensure the support service can offer you relevant solutions to arising issues and operate during a convenient timeline. They should also be accessible via different channels, whether phone, email, or live chat.
As mentioned above, choosing the best broker to buy oil stock should be based on personal preference and not what other traders recommend. However, you can still use previous and current traders’ opinions to fully understand the pros and cons of a broker. In addition, by sampling comments and reviews from Google Play, the App Store and Trustpilot, you will be able to make the best choice to maximise your potential.
Oil Stock Price Today
Oil is a volatile asset, and its share price keeps on fluctuating. For this reason, it is challenging to track oil performance and make the best investment decisions. That is why we have prepared this live chart below to help you along the way. The live chart also lists historical data for oil to help you develop the best investment strategy.
Best Oil Stocks for 2024
Crude oil is known as a source of energy used in the production of goods beneficial in everyday livelihood. It is high in demand, especially in industries, and investing in the commodity will be a good idea. As an investor, you must identify the best oil stocks to buy or trade in 2024, especially now that oil’s demand is rebounding after staying low during the 2020 pandemic period.
Luckily, we have listed below the best oil stock for 2024 based on our research and analysis. Read on to learn more about these oil stocks.
- ExxonMobil
Founded in 1859, ExxonMobil is the largest US oil company that evolved from a regional kerosine marketer to one of the largest publicly traded petroleum and petrochemical companies globally. Although oil share price keeps on fluctuating, the company has grown over the years and pledges to continue growing moving forward.
- TotalEnergies
Total Energies SE is a French oil and gas company established in 1924. It currently operates in Europe, the Middle East and Africa but plans to extend its services and products Across America and Asia. Total Energies strives to become carbon neutral by 2050, and its ability to remain diversified into renewable energy makes the company worth investing in. Moreover, as a shareholder, you will benefit from dividends payments.
- BP
BP PLC is one of the significant London-listed oil and gas companies operating in over 80 regions globally. Although the company reported a decrease in energy consumption in 2020, it has taken measures to pivot towards success. For instance, BP aims at 50 gigawatts of renewable generation capacity by 2030. The company plans to invest over £5 billion annually to achieve its long-term objectives. Additionally, BP raised its dividends and has restarted repurchasing its shares.
- ConocoPhillips
ConocoPhillips is an American multinational corporation that specialises in natural gas liquids. Founded in 2002, this oil and gas company has remained in the headlines due to its successful operations in various countries globally. Its recent move to buy Permian Basin for $9.5 billion has attracted investors globally looking to invest in ConocoPhillips shares. ConocoPhillips also pays dividends to shareholders.
FAQs
Yes. Oil is the leading resource for energy production, and its presence globally indicates that it is a commodity that is here to stay. However, the commodity is volatile and investing in it can bring about good profits if you are keen on managing your investment activities.
You need to find a broker that allows you to invest in oil at a low commission or spread. Such brokers are plenty in the UK, with Capital.com being a good example.
Absolutely. Many investors and traders are making money investing in oil. To maximise your chances for success, conduct a thorough analysis before trading. You should also find the best broker that supports you with quality resources to maximise your potential* for returns.
*Your capital is at risk.
The stock symbol for crude oil is CL, and it is listed on various stock exchanges globally.
Using an online broker, you can trade crude oil by purchasing it as stock from oil companies. You can also trade the assets as CFDs, indices, futures contracts, mutual funds, and ETFs.
Conclusion
Oil is a unique and popular commodity that has brought about changes not only in manufacturing industries but also at homes. You can gain direct exposure to oil by purchasing the commodity as a physical asset. You can benefit from oil by buying oil stocks or shares from oil companies and, thus, have indirect exposure to the commodity.
The oil share price is determined by the demand and supply of petroleum-based products. Therefore, by using the live chart above to track oil’s performance, you will be able to identify the best time to make a move. So, take your time to conduct extensive market analysis and find a broker complementing your needs for a better chance of succeeding.
To diversify your investment portfolio, consider exploring opportunities to invest in lithium, a critical resource in today’s evolving economy.
2 Replies to “How to Invest in Oil”
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25,000 hours of testing 70+ brokers. Our recommended broker is Plus500.
Our recommended broker is Plus500.
I am familiar with eToro as I am currently trading with them. I would say that they are good to go if you want to trade CFDs and ETFs. eToro is regulated with ASIC, CySec, FCA so safety always comes first, especially for me. The trading conditions seem quite good to me.
Also, the execution speed is good.
You can try out their demo and check the conditions. Cause to me, those conditions are good and I am quite satisfied with them.
Good luck!
I have gathered the list of the top UK-regulated brokers for your convenience! In my rate is
- ETX Capital 10/10
- AvaTrade 10/10
- Plus500 9/10