Oil Investment Tips

Oil Investment Tips

Oil.com advisers provide essential investment tips for beginners. Tips are updated with market changes and evolution.

Invest on Oil ETFs and not on single companies.

Oil ETFs always follow oil prices good or bad. So, if you think oil prices will go up and you are feeling bullish, investing in Oil ETFs is the best way to proceed. Why? Because if you invest in oil production companies (the only ones that move according to oil prices) your investment is subject to a lot more variables than only Oil price, for example political factors, geological changes, marketing, etc. Thus, the Oil market price could rise but the company shares may not necessarily go up with it (e.g. because their production price also increased). To find out which Oil ETFs are available to trade see our Oil Investment section.

Investigate before choosing a Stock Broker.

There are a good number of Online Stock Brokers, they are the link between you and the market. There are different ways in which brokers manage their relations with their clients.
The most common types of dealing are:

  • Execution - brokers only buy or sell on your request;
  • Advisory: brokers offer an advisory system, they advise you on best performing stocks and deliver various services to help you with trading;
  • Discretionary: Brokers manage all your information and buy or sell on your behalf.

The last two types charge higher commissions. If you are just entering the trading world we recommend to start with an Advisory Broker and switch to an Execution Broker once you get the hang of it.
When choosing a Stock Broker find out thoroughly all the costs and fees that they charge you, also they usually offer temporary opportunities for new clients, but be sure to find the best one around! Also look for online customer reviews (not the ones promoted in their own site) and try to learn about the Brokers trading platforms, it should be comfortable and easy to use.

Peak Oil Theories

Peak Oil is a term used to refer to the point where maximum petroleum extraction possible is reached worldwide. Several sources and oil theorists say that we are very near to this event. If this happens oil prices will go really high; obviously if oil available becomes less and less and the demand stays pretty much the same, the price per barrel will go up. Of course there alternative energies and these will continue to appear, but they will not satisfy global demand for many years. If you are looking for a long term investment we recommend you invest on Peak Oil predictions and extract your own conclusions.
Here are some links to get you started: Wikipedia article - Peak Oil News & message boards

Learn about past changes.

You should check how Oil prices have evolved in the last years according to world events, so you can learn how oil prices could react to future changes. One way of doing this is by using our Oil Prices section, where you can check oil price changes (and even check it side by side with ETFs or futures contracts) and use it along with WorldNews network archive search. This way you can see what was happening worldwide as Oil prices rose or fell and get an idea on how oil prices interact with global events.