Investment in oil is not a financially advisable for a person who is new to investing in commodities. If an investor is afraid of losing money, or if they cannot afford the risks involved, then Investing in Oil is not for them. There are losses, gains, and risks in all types of investments, and any person Investing in oil must understand the market, Crude oil prices. and price trends, and analyze the risks involved. The lure and potential of making large gains is the main reason for many to participate in the financial activity, small investors should take greater care to analyze the avenues for investments in oil and not follow the herd.

There are numerous ways to Invest in Oil. perhaps reflecting crude oil and petroleum products deep integration with almost all facets of our life and a country’s economy, including Industries, transportation, food production and power generation.

Avenues for Oil Investments include

Oil ETFs

Oil ETFs are a safe option for investors who do not want to take risks and yet make some profit when Crude oil prices increase. Investors do not require in-depth knowledge of any financial market. Oil ETFs in the United States has opened up the market and made the investment process easier in many ways. This includes investments in oil products accessible to small and large investors. Whether an investor is looking for short-term gains and upward movement in oil prices, or a hedge against rising prices, ETFs can offer a cheap, efficient, and easy method to gain exposure to prices of commodities and Investing in Oil.

Managed Mutual Funds For Oil Investments

Invest in Oil through an easy way for small and medium investors who want to invest in thousands and not in millions. Mutual Funds that specialize in Oil are best for investors wary of taking big risks. The area of specialty may differ from Fund to Fund. While some Funds invest in high-risk fields of exploration, and searching for new oil deposits and oil fields, other Funds invest in oil company stocks.

The advantage for investors in opting for Mutual Funds is that they can get extensive information before investing their money. Investors can request a prospectus by contacting the Mutual Fund they are interested in. The prospectus provides the investor with the information required to make a decision.

The Futures Market

The Oil futures contract market can be an excellent option for investors and speculators willing to invest large sums of money and reap the profits, but who can also bear the losses. There are numerous advantages in the Oil futures market. First, oil futures are margin based, which simply means that an investor does not have to pay a full price for a contract, but only a small required margin amount and the required maintenance money for the futures contract. The typical margin required for one oil futures contract, currently worth around 90,000 $, is around 4000 $.

Invest in Oil Stocks

Stocks of major oil companies have a close relation to Crude oil prices. Oil company stocks are a very good option to Invest in Oil. Oil stocks can be traded through your stock broker. Many CFD stock brokers also allow investors to trade in oil stocks on a margin basis. This will however involve financing costs.

In conclusion, an investor looking for large profits will have to make large investments, and bear a greater loss. For a small investor searching for safe options for investments in oil, Mutual Funds and Oil ETFs are the best.