How do I buy into oil?

[ydontu]

The price of oil is relatively low and I think the price of oil will go up over the course of the year. I have an on line shares and so how do I buy into it - is there a share or a certain company or what?Sorry if there is a key post on this but I couldnt find one.

 

[marksa]

Maybe better with ETFs such as CRUD:LN or OILB:LN or LOIL:LN all of which give you returns linked to various forms of Oil commodity rather than the oil companies etc. look them up on www.bloomberg.com

 

[lemur]

Try USO.

 

[beekeeper]

you could setup a spread betting account with worldspreads or cmc and buy it there. This i probably the easiest way to do it and offers you the chance to gain an exposure without having to lay out the full cash ie. leverage

 

[badabing]

The price of oil is relatively low and I think the price of oil will go up over the course of the year. I have an on line shares and so how do I buy into it - is there a share or a certain company or what?Sorry if there is a key post on this but I couldnt find one.

Note that oil is currently trending down and you are fighting the trend by investing in an oil ETF

You also have the option of a bear - oil - ETF;

About as straight line as straight line can be (zoom out to see the last 6 months);
http://finance.yahoo.com/echarts?s=DTO#chart1:symbol=dto;range=1d;indicator=sma(100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Its a powershare so worldspreads dont do it

Here's a positive oil etf which worldspreads will do;

http://finance.yahoo.com/echarts?s=USO#chart2:symbol=uso;range=20080808,20090217;indicator=sma(200)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Anyone know of any other bear market oil ETF's?

 

[efm]

When buying a commodity ETF I have seen it recommended that one looks at the impact of conatango in the market.

If I understand it correctly you need to look very carefuly at the make up of the etf to see how contango affects the price. If the etf is trading short term futures it can crystalise losses very quickly (I think!).

 

[demoivre]

When buying a commodity ETF I have seen it recommended that one looks at the impact of conatango in the market.

If I understand it correctly you need to look very carefuly at the make up of the etf to see how contango affects the price. If the etf is trading short term futures it can crystalise losses very quickly (I think!).

You think right and the situation arises when the fund is rolling forward the futures contract to avoid taking physical delivery of the oil. You can buy oil futures for any month. To avoid taking delivery the fund closes their front month position and buys the forward month to maintain their long position. With contango the forward month futures price is greater than the front month price so the fund is out of pocket because of rolling forward the contract.