Your Questions About How To Invest In Oil

Sharon asks…

What currency does George Soros use to protect his billions?

I know he has alot of Gold and invests in Oil in Brazil. What currency does he use, since he is trying to destroy the value of the dollar- He said he profits from destroying currency of countries, how does he do it? What does he invest in to profit a billion dollars on destruction of peoples lives?

John answers:

Bullets.

Laura asks…

How can I buy crude oil shares?

If I want to invest in crude oil, how can I do it? I am planning to invest about 1000$. So, it’s not a hige investment too.

John answers:

You can’t actually buy shares in crude oil itself but you can buy shares in Oil companies. If you want to trade the ups and downs of the oil price then you’ll need to buy and sell oil futures. Easiest way is to spread bet the oil price via a spread betting company.

Ruth asks…

Does anyone know how to invest in crude oil, I only have a few thousand dollars.?

John answers:

An ETF like USO would be a good choice.

Paul asks…

how to buy oil stocks……………………….?

Hi, could someone tell me how can I invest in oil stocks (not in any speciffic company) let us say I wan to buy 100 barrels of oil and after 10 years sale them, what are the risks, thanks.

John answers:

You want to buy oil company stocks, or do you want to buy oil?? If you want to buy oil companies, then buy Exxon Mobile, Shell, British Petroleum, etc. If you want to buy oil itself, then purchase the OIL etf. What are the risks?? Well, the price of oil could go down, due to new supplies coming online. Or the world could find an alternative to oil

Here is the oil etf
iPath S&P GSCI Crude Oil Tot Ret Idx ETN NYSE:OIL :

Donald asks…

Questions about investing in oil?

I am new to oil investment, so go easy on me.

1) where do you buy oil from.
2) do you actually get it like gold and silver or is it like shares?
3) how much would it be a barell?
4) where do you trade it In?

Thanks

John answers:

1) Unless you have an oil storage facility, you don’t buy physical oil. Oil through futures contract is traded in units of 42,000 gallons so this isn’t something you keep in your backyard.

2) A barrel of oil is 42 gallons. It sells for about $100. $100 worth of gold is some tiny little thing that you could keep in your breast pocket. $100 worth of silver is a few silver dollars. $100 worth of oil is a big ugly drum that needs to go to a refinery to be worth anything and would cause a toxic spill if it fell over. Have you ever seen someone with drums of oil stacked up outside their house?

It is possible to lease storage capacity and take oil delivery. There is a trading firm near where I live that specializes in this sort of physical energy trade. You are a very long way from doing any of that kind of trading.

3) 42 gallons

4) You trade oil by trading oil futures contracts. You can also buy oil ETF’s that essentially buy and roll oil futures or use other derivatives like swaps to track oil. If you wanted to go long oil, you would probably by an oil ETF (nobody should let you have a futures trading account).

When you say “investing” in oil, what you really mean is hoarding oil. Owning oil, or any physcial commodity for that matter, is not really investing in that you are not capitalizing anything useful and should not expect much or any positive long-term gain. If you want to invest in oil, then you should be buying equities in companies that produce oil like Exxon or Noble Drilling. Then you are actually capitalizing something useeful and should expect long-term rewards.

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