How to invest in oil
How to buy oil or invest in crude oil online? Whether you're looking to buy crude oil online, invest in oil stocks, or start trading oil through financial platforms, there are accessible solutions for gaining exposure to this strategic commodity. Discover the main methods for investing in crude oil, as well as the risks, opportunities and best practices.
During periods of economic or geopolitical instability, the crude oil market tends to become more volatile due to global demand shifts, geopolitical tensions or OPEC decisions. These fluctuations impact oil prices and can affect assets like ETFs, oil stocks or CFDs. While trading crude oil online can offer short-term opportunities, it also involves high risks. Always review product costs and use risk-management tools, especially when using leverage.
The capital required depends largely on the product used to gain exposure to fluctuations in the oil market. For some stocks in the sector or ETFs listed on the stock market, a few hundred pounds may be enough, depending on the platform. Some brokers allow fractional asset purchases, making these products accessible to a wider audience. CFDs (Contracts for Difference) allow exposure with a small initial capital outlay thanks to leverage, but they carry a high risk of rapid loss in the event of unfavourable market movements. Conversely, futures contracts often require more capital and a good knowledge of the financial markets. Regardless of the product you are considering, it is essential to fully understand the mechanisms and risks involved, including volatility, leverage and potential capital loss.
Investing in oil involves taking a long-term position on this commodity, often through stocks or ETFs. The aim is to take advantage of a structural trend, such as rising global energy demand. Speculating on oil, on the other hand, involves trying to profit from short-term fluctuations, usually with leveraged products such as CFDs. This approach requires greater responsiveness and technical knowledge. The two strategies are not mutually exclusive: some platforms allow you to combine passive investing (ETFs) and active trading (CFDs), provided you fully understand the differences in risk and duration.
Buying oil online or investing in oil on the stock market is attracting more and more savers looking to diversify their portfolio. From crude oil stocks to oil ETFs and CFDs, investors have multiple ways to gain exposure to oil prices without buying physical barrels. Knowing how to invest in crude oil, which platforms to use, and what risks to consider is essential for navigating this volatile yet strategic commodity.
🛢Key points to remember before buying crude oil
- Buying oil online: several platforms provide access to oil-related products without physically storing barrels.
- Buying a barrel of oil: it is possible to take a position on the price of a barrel via contracts (futures), ETFs or stocks in the oil sector.
- Buying oil on the stock market: you can invest in oil companies or directly track oil prices via trackers (ETFs).
- Various ways to invest in oil: ETFs, stocks, sector funds, physical commodities, derivatives, CFDs.
- Understanding the risks: high volatility, geopolitical influence, leverage possible depending on the instruments, no passive return.
- Investing in oil: A good investment depends on a clear strategy, risk management and choosing products that are suited to your profile.
Investing in oil is attracting interest from savers looking for opportunities linked to commodities. Whether buying oil online or investing in the stock market via financial products, this strategic energy resource is attractive for several reasons. Oil remains one of the most traded assets in the world, with a direct influence on markets, currencies and the global economy. Positioning yourself in this commodity gives you unique exposure to geopolitical, industrial and economic dynamics.
Investing in oil can meet different objectives depending on the investor's profile:
However, buying oil or investing in oil is not without risk. Oil prices are heavily influenced by geopolitical events, political decisions and sudden changes in demand. This means significant volatility, for which you need to be prepared. In addition, certain products such as futures and CFDs, although they offer easy access to the market, require rigorous risk management and a good understanding of financial leverage.
Before buying oil online or investing in an oil-related product, it is therefore essential to understand the mechanisms involved, compare the available platforms and choose a product that is suited to your investment horizon, objectives and risk tolerance.
Buying oil online has never been more accessible to investors. Between derivatives, stocks, ETFs and even futures contracts, there are many options for investing in this strategic commodity. But which method should you choose based on your profile, investment horizon and expectations? Here is a comprehensive overview of the ways to gain exposure to the price of a barrel of oil, with their advantages, disadvantages and logistical subtleties.
Buying shares in major oil companies is one of the most direct ways to gain exposure to the oil market. TotalEnergies, ExxonMobil, BP and Chevron are benchmark stocks listed on the world's major stock exchanges.
Investing in these stocks allows you to:
💡 However, this method does not offer a perfect correlation with crude oil prices. Company results can be influenced by other factors, such as debt, management, diversification strategy towards renewable energies, etc.
ETFs (Exchange Traded Funds) allow you to invest in a basket of stocks or contracts related to oil. Some ETFs directly track Brent or WTI price indices, while others focus on large companies in the energy sector.
Investing in an oil ETF has several advantages:
❗️Caution: some ETFs invest in derivatives with expiry dates, which can lead to a ‘contango’ effect (erosion of performance when forward contracts are renewed). It is therefore essential to read the documents carefully before investing.
While it's technically possible to buy a physical barrel of crude oil, it's not practical for individuals. Logistics, safety and environmental constraints make it unrealistic.
➡️ In summary: buying physical barrels of oil is not a realistic option for individual investors. It is better to focus on financial instruments that replicate the price movements of a barrel, such as CFDs, stocks or ETFs.
Oil futures contracts allow you to buy or sell a barrel at a set price for future delivery. This market is very liquid and used by energy professionals, hedge funds and financial institutions.
But beware:
⚠️ For most individuals, this product remains too complex. This is where oil CFDs can be a flexible and more accessible alternative.
CFDs (Contracts for Difference) allow you to trade on the price of oil (Brent or WTI) without owning barrels or buying stocks. They are derivative products that replicate market movements in real time.
Why choose oil CFDs via a platform such as eToro?
➡️ CFDs offer a good compromise between complexity and flexibility, particularly for active traders looking to take advantage of short- or medium-term market movements. However, it is important to note that leverage can also amplify losses. Good risk management is essential.
🔗 [To learn more about oil CFDs, read our full article →]
When looking to invest in oil, there are several financial instruments available: oil company stocks, ETFs, futures contracts or CFDs. Each has its own characteristics in terms of liquidity, fees, leverage and accessibility.
In terms of liquidity, oil futures (such as those listed on the NYMEX or ICE) are among the most liquid instruments and are popular with professional traders. Oil ETFs also offer good liquidity, although this varies depending on the fund. Oil CFDs offered by platforms such as eToro have sufficient liquidity to execute orders quickly, even for small amounts.
In terms of fees, ETFs stand out for their simple pricing and lack of leverage, which is ideal for passive exposure. Futures contracts involve order execution commissions, margin calls and sometimes complex rollover fees. CFDs, on the other hand, offer a clear cost structure (spread, financing costs), but require a good understanding of overnight fees in the event of a prolonged position.
There is no leverage on stocks and ETFs, but it is present on futures and CFDs. This leverage allows you to increase your exposure, but also your potential losses. CFDs often offer adjustable leverage, which allows you to better control your level of risk.
Finally, CFDs stand out in terms of accessibility: all you need to do is register online, without having to open a traditional securities account. This makes them a popular solution for those looking to start investing in oil online, particularly for those who want to take advantage of market movements quickly. However, it is important to bear in mind that CFDs are leveraged instruments and expose you to the risk of rapid loss of your invested capital. Misuse of leverage can amplify losses as quickly as gains. This is why rigorous risk management and a good understanding of how these products work are essential.
Want to invest in oil in just a few clicks? Here's how to do it, without jargon or headaches:
⚠️ Tip: Start small, observe the market and use leverage with caution.
eToro is a multi-asset platform that offers both investing in stocks and cryptocurrencies, as well as trading assets in the form of CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% 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.
You will never lose more than the amount invested in each position.
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