The oil market is one of the most successful in the world – oil is known as liquid gold for a reason.
Many who invest in the market make considerable profits, so let’s talk about how you can do so too.
How Do You Buy Oil Stocks in Australia?
There are many ways to buy these stocks. We’ve discussed the most noteworthy of these below.
The best way to invest in oil stocks is through share trading. You can get stocks from big companies. For example, Brent Crude Oil, Light Sweet Crude Oil, and Lukoil shares are freely available. When you purchase them, you will have to wait for their value to go up. Oil is generally a very profitable industry, although it’s also volatile.
To help you figure out the right time to purchase shares, you will need to have a thorough understanding of the energy cycle. You also need to evaluate the landscape before parting with your money.
If you’re planning on buying shares but not selling them, consider getting dividends. These are sums that companies pay according to the shares you own. That being said, you’ll need to have a large stake in the company to get considerable payments.
You can purchase stocks through online brokers. Luckily, there are many available for Aussies. Due to this, you could find one that’s worth your time.
ETFs are known as Exchange Traded Funds. They are groups of a specific asset. They are advantageous as you won’t have to place all your cash in specific firms. Getting hold of ETFs is a lot like share trading. The collection of securities you’re trading could be stocks.
However, you need to consider the fact that ETFs fluctuate many times a day. For example, it will track how oil stocks are doing, or the price of the liquid in general.
There are many types of ETFs – you’ll have to trade the commodity type. You can use an online broker to do this.
Best Brokers for Oil Trading in Australia
You’ll first have to find the right broker. It’s not hard to find a reliable one with a little research. You should work with a name that allows you to buy and sell international stocks. We looked at three of them in the latter part of our article.
You should also consider is how well-regulated it is. If it’s not very secure, it won’t be following a framework that keeps your money safe, so you will be taking a risk. For Australians, make sure the Australian Securities and Investments Commission regulates the site you’re interested in.
You’ll then have to create a trading account. Depending on the site you’re working with, you will need to add a minimum deposit. This may differ from broker to broker but some don’t even require it.
When it comes to buying oil shares, we believe HFTrading is the superior choice. They are not as well-known as counterparts, but they make up for it with the services they offer. To begin with, you will have access to one of the most thorough education centers we’ve ever seen. Its informative guides make trading easier, especially for newbies.
If you’re new to trading, you might want to practice before you invest. The platform offers demo accounts. You can practice with up to USD 100,000 in virtual money.
You don’t have to worry about the site not being regulated. It is governed by the Australian Securities and Investments Commissions (ASIC), as well as the New Zealand Financial Market. As mentioned, this allows for a framework that ensures cash-flow, privacy, and experience.
This broker is worth it. However, you’ll only be able to utilize their services if you’re Australian. Moreover, the site isn’t available in any other language apart from English.
You may be wondering how much of a minimum deposit you’ll need to make. This would be $250, which is competitive. Furthermore, you won’t be charged commissions fees.
A range of assets could be traded. As of now, they offer global stocks, FX pairs, commodities, ETFs, and CFDs. To be more specific, there are over 750 assets to be invested in.
Yes, there is helpful customer support. They offer 11/5 help. 24/7 is preferred, but their support team is very friendly.
2. IG Trading
IG Trading is known to be one of the leading brokers in the game. Unfortunately, their currency conversion fees are known to be high. This is a factor that brokers in general struggle with. There are brokerage fees, but you won’t be charged for commissions.
Since you’re looking to invest in oil shares, you’ll be pleased to know that there are 13,000 stocks at your disposal. IG Trading says that 11,000 of them are Australia while the rest are international.
The platform is heavily regulated. It’s governed by ASIC and you can trade various stocks. This includes CFDs, cryptocurrency, shares, forex, and ASX stocks.
You get 24/7 support. If you’re a fan of tickets, know that they don’t offer this contact method.
Like HFTrading, they are only accessible to Australians. Specifically, you can only use their services if you’re an Australian taxpayer.
Of course, there is access to demo accounts. You also get a thorough education center.
From all the brokers discussed, eToro is the most famous. They allow nationals from around the world to invest in their stocks, including Australians. Of course, there are some restrictions in certain countries.
eToro is highly secure. Like its counterparts, it is authorized by the Australian Securities and Investments Commission. If this isn’t enough, many international bodies regulate it too, such as the CySEC and the FCA. Since there are so many frameworks to follow, your cash is guaranteed to be safe.
Another advantage is that you won’t be paying brokerage fees. Although this is tempting, know that you can only work with US stocks. If you want to invest in an Australian oil company, you’re in trouble.
There are many things that you can buy and sell on it. eToro lets you trade CFDs, shares, ETFs, forex, and cryptocurrencies. A demo account feature is present, as well. There is an education center too, but it’s not as great as HFTrading’s. Its resources are not very informative. That being said, you’re getting access to very handy tools – you can mimic the trading activities of different users.
Although its resource center isn’t the best, you will have access to information on how the market is doing. eToro even conducts webinars on its site.
Another noteworthy factor about them is that you’re getting 24-hour support. Before you get too excited, know that this is only available on weekdays.
The following are what you’ll be able to trade: US stocks, cryptocurrencies, CFDs, commodities, and global forex.
Why Invest in Oil Stocks?
The Coronavirus pandemic took the world by storm. It affected a range of industries, including oil. Oil is used for the production of plastics, waxes, asphalts, lubricants, and countless chemicals. Not only is it used in many every-day products, but it’s seen in fertilizers as well as pesticides.
Although renewable energy has been on the rise, the oil industry has more than held its ground. In 2019, 24% of Australia’s electricity generation was produced by renewable sources – the Clean Energy Australia Report (2020). Compared to 2018, this was an almost 3% increase. Oil still makes up 76% of the country’s energy generation. This percentage of renewable energy will take a very long time to reach – if it ever will.
What makes oil shares so tempting to invest in is the market’s volatility. Russia and Saudi Arabia, the major producers in the industry, butted heads recently. This is as Russia turned down OPEC – they offered to cut supply to help cope with the loss in demand for oil. Saudi Arabia decided to pump more oil, causing its price to plummet.
For an investor, falling prices are ideal. You can get hold of stocks that are low in price, and when they bounce back, you’ll be able to make a considerable profit.
As an investor, you have a choice of industries to invest your money in. Oil is one of these. It is a market that’s highly profitable. Not only is it crucial in the modern world, but it’s also a very volatile market. Politics, conflict, supply, and much more affect its price. When you purchase affordable shares, you’ll be making a profit when the price rises. You can also get hold of multiple stocks, as well as many dividends.
When it comes to investing in the industry, share trading and ETFs are the best. This can be done be getting in touch online brokers. There are several, but our favourites are:
- IG Trading
Of course, there are equally good services, but these three options provide the smoothest experience. With all this information in hand, you will be better equipped to invest in oil shares.