How To Invest In Oil: A Guide For Beginners

If you're wanting to learn how to invest in oil, it's important to point out right off the bat that oil investing isn't for everyone. To give you an example of how wild of a ride oil can be, consider the fact that West Texas Intermediate was trading in the mid-50s in February. Then it fell to negative $37.63 on April 20.

The plunge was due to the reduced travel caused by the Covid lockdowns. As demand for oil dried up, storage swelled. Negative prices reflected the fact that futures traders were willing to pay someone to take delivery of their oil.

Oil has been a source of speculation and investment for several years, with the bulk being done by traders. But, as a beginner, how do you invest in such a volatile commodity? There are a few ways to invest in oil - some more volatile and risky than others.

Before rushing to buy a futures contract or calling your broker about spot prices, first consult the following beginner’s guide to investing in oil. You'll learn everything you need to know about how to invest in oil including how much of your portfolio oil should comprise and your best oil investment options.