Always remember that investments can go down as well as up in value, so you could get back less than you put in. A rule of thumb is to hang on to your investments for at least five years to give them the best chance of providing the returns you want.
We’ve compiled a list of the best oil trading platforms in the UK. These are our top thirteen oil trading platforms for buying and selling oil company shares, mutual funds, ETFs, spot prices, futures, and options.
Please keep in mind that when you trade, your capital is at risk. The fees below are not exhaustive–other fees apply. ISA, pension, and tax rules also apply.
Compare the best oil trading platforms in the UK:
eToro, often regarded as the best trading platform in the UK, is a multi-asset platform that offers both investing in stocks and cryptoassets, as well as trading CFDs. With eToro, UK traders have real-time access to thousands of stocks, ETFs, indices, commodities, forex, cryptocurrencies, and NFTs from top exchanges worldwide. Catering to both beginners and expert traders, eToro provides an impressive range of fundamental and technical analysis tools, including market news, economic data, social media and news sentiment trends, and advanced charting tools. ProCharts, a professional-grade technical analysis tool available on this top UK trading platform, allows users to compare charts from different financial instruments and time frames. eToro also offers risk management tools, such as Stop Loss, Take Profit, and Trailing Stop Loss, to help you better manage your positions and protect your investments.
For customers who prefer ready-made investment portfolios, eToro has over 40 fully allocated, balanced investment portfolios, focusing on market segments you can understand and relate to. Some of the portfolios include MetaverseLife, BigTech, GoldWorldWide, Vaccine-Med, BitcoinWorldWide, Diabetes-Med, Driverless, and GigEconomy. These portfolios are a grouping of several assets, such as stocks, cryptocurrencies, ETFs, and even people, bundled together based on a predetermined theme or strategy. eToro also offers Copy Trading, a unique feature that allows everyday investors to copy the trades or investments of top-performing traders on the eToro platform. Anyone can copy trades on eToro, and likewise, anyone can give others access to copy their trades. If you are an expert trader approved to participate in eToro’s Popular Investor Program, where others copy your trades, you will be eligible to receive monthly earnings.
It is entirely free to open an account with eToro, and all registered users receive a US$100,000 demo account for free, which you can use to practise trading until you become confident. Trading on eToro occurs in USD, so a currency conversion fee will apply if you deposit or withdraw in a currency other than USD. Withdrawals incur a fee of US$5 (£4), and the minimum withdrawal amount is US$50 (£40). For UK customers, eToro offers an eToro Money app which allows you to convert your GBP to USD free of charge, thereby reducing your foreign exchange costs. eToro does not offer an ISA or SIPP.
Please note: Your capital is at risk. 80 - 90% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Additionally, cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply. Copy Trading does not amount to investment advice. Other fees apply. For more information, visit eToro.
Pepperstone, a top contender for the best online broker in the UK, is a CFD and forex broker that allows you to trade a wide variety of instruments, including forex, indices, stocks, ETFs, commodities and other assets via contracts for difference (CFDs). The Pepperstone platform boasts low-cost spreads, fast execution speeds and access to over 1,200 trading instruments. The Pepperstone CFD trading accounts allow a minimum trading size of 0.01 lots and a maximum of 100 lots. Retail traders can access leverage up to 30:1 and over 60 currency pairs.
Pepperstone also allows scalping, expert advisors, hedging, and news trading. With Pepperstone, you can trade and enjoy the seamless creation of advanced trading strategies via some of the most popular and powerful trading software in the world, including TradingView, MetaTrader 4 (MT4), MetaTrader 5 (MT5), CTrader, DupliTrade (for social and copy trading), and Capitalise AI (for code-free trading automation). The Pepperstone platform is suitable for both beginners and advanced traders. It is especially suitable for professional traders who want to take advantage of higher leverage. Pepperstone also has a suite of educational materials to help traders at every level.
It is entirely free to open an account with Pepperstone, and all registered users gain access to a free demo account which you can use to practise CFD trading until you become confident. On Pepperstone, the spreads, which function as trading fees for CFD brokers, start at 0.6 pips for forex CFDs, 0.4 for index CFDs, 0.05 for commodity CFDs, and 0.10% per side for UK share CFDs. Pepperstone also charges a swap rate (overnight fee) for holding CFD positions overnight. Other fees apply. Pepperstone does not offer an ISA or SIPP.
Please note: When you invest, your capital is at risk. Between 74 and 89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and can afford to take the high risk of losing your money.
XTB stands out as the best day trading platform in the UK. It is a user-friendly, fully customisable European trading platform renowned for its extensive CFD and forex trading offerings. XTB provides traders instant access to hundreds of global markets and over 5,600 instruments, including forex, indices, commodities, stock CFDs and ETF CFDs. Customers can take advantage of tight spreads from 0.2 pips, 30:1 leverage and zero commission on stock and ETF CFDs.
With XTB, you can trade using the in-house trading software, xStation, or via MetaTrader 4 (MT4). xStation by XTB is a powerful trading software available on iOS, Android and desktop devices and suitable for both beginners and advanced traders. The xStation trading software gives you access to comprehensive charting and risk management tools. With the inbuilt trading calculator, you can easily estimate costs, profits or losses before opening a position, modify stop loss and take profit orders directly on the chart or close all positions with a click of a button. As one of the best online brokers in the UK, XTB also provides an extensive library of educational materials, including videos, webinars, and courses suitable for both beginners and experienced traders. When you sign up, you will have access to a dedicated account officer who will work with you to help you better understand your needs and how XTB operates.
It is free to open a trading account with XTB, and all users have access to a free demo account with £100,000 in virtual funds that you can use to practise trading and investing until you become confident enough to use real money. Deposits in GBP and EUR are free of charge, but withdrawals below £60 have a £12 processing fee. Stock and ETF CFD trading on XTB are commission free. Spreads and margins apply to other products. Inactive accounts attract a monthly fee of €10 (£9). Other fees apply. For more information, visit XTB. XTB does not offer an ISA or SIPP.
Please note: Contracts for Difference (CFDs) are leveraged products and carry a significant risk of loss to your capital, as prices may move rapidly against you, and you may be required to make further payments to keep any trades open. Between 74 and 89% of retail investor accounts lose money when trading CFDs. These products are not suitable for all clients. Therefore please ensure you fully understand the risks and seek independent advice.
DEGIRO is an award-winning investment broker and trading app that allows you to trade stocks, bonds, ETFs, options, futures, warrants, certificates, and more across 50 international exchanges. It offers tens of thousands of regulated financial instruments that enable investors to diversify their portfolios worldwide.
With DEGIRO, you can invest in up to 200 commission-free ETFs. This means you may not have to pay a dealing charge when you invest in just ETFs (terms apply). Dealing UK stocks costs £2.75 per deal, while US stocks cost €1 (~ £0.90) per trade. A currency conversion fee of 0.25% also applies to US stocks. To make sense of the charges, visit DEGIRO. DEGIRO does not offer an ISA or SIPP.
DEGIRO is suitable for beginners and advanced investors, and you can access the platform on any device via the web portal or mobile app. DEGIRO currently has over two million customers across 18 countries.
Capital at risk.
Saxo Markets is the UK division of Saxo Bank, a large European bank that allows you to invest in 60,000+ financial products from stock markets worldwide. With Saxo Markets, you can invest in UK and overseas stocks and shares, bonds, ETFs, forex, CFDs, futures, commodities and options.
Saxo Markets allows you to invest in one of two ways depending on your investing savviness: Beginner investors or those who prefer to choose a ready-made portfolio can select from one of the managed portfolios on offer where Saxo experts navigate the markets and manage your investments on your behalf. The average cost of this managed portfolio is 0.95% per year (including fund costs). Advanced or more confident investors can choose from the range of financial products on offer and build their portfolios themselves. Saxo Markets traders benefit from extensive charting with 50+ technical indicators, integrated trade signals, news feeds and risk-management features via the SaxoTraderGO platform. Advanced traders can access even more sophisticated trading features on SaxoTraderPRO, Saxo Bank’s desktop-only advanced trading platform.
Saxo Markets has different transaction fees grouped into trading tiers. If you plan to trade high volumes, you can upgrade your tier to get lower transaction fees. The Classic tier, which attracts the highest trading fees, costs 0.10% (min. £8) per deal for UK Stocks and US$0.02 (min. US$10) per deal for US Stocks. Other fees apply. Saxo Markets’ suite of products includes a Trading Account, Stocks and Shares ISA and SIPP.
Please note: Capital at risk. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Interactive Investor, commonly hailed as one of the best online trading platforms in the UK, is a subsidiary of wealth management giant Abrdn and the second-largest investment platform in the country. Also well known for its fixed monthly subscription fees (as opposed to annual percentage-based fees like most other investment platforms), Interactive Investor has been providing investment services and financial information to UK customers since 1995.
If you choose to invest with Interactive Investor, you will gain access to over 40,000 investment options, including UK and overseas shares, funds, investment trusts, and ETFs. This is the second-widest choice of UK and international investments offered by an investment platform in the UK. Interactive Investor allows you to build your portfolio in multiple ways depending on your investment goals, attitude to risk and personal preferences. Beginner investors or those who prefer ready-made investments can build their portfolios using Interactive Investor’s Quick-Start Funds, an easy way to start investing where you choose from six low-cost funds prepared by the team of experts at Interactive Investor. Advanced or more confident investors can choose from a wide range of funds and shares and build their portfolios themselves. Interactive Investor gives you access to 17 global stock exchanges, including exchanges in North America, Europe and Asia Pacific. These include markets such as the FTSE 100, FTSE 250, FTSE All-Share, S&P 500, NASDAQ, NYSE, Dow Jones and more. In addition to the above, Interactive Investor offers Japanese, Indian and Chinese shares in the form of American Depositary Receipts (ADRs).
Interactive Investor gives you a free trade every month, which you can use to buy or sell any investment. After that, trades usually cost £5.99. It also offers a free regular investing service that allows you to deposit as little as £25 a month towards your investments without paying a trading fee each time. For those investing £30,000 or less, Interactive Investor offers a cheaper plan called Investor Essentials that costs just £4.99 a month. This plan does not come with the monthly free trade. Interactive Investor also has lots of expert ideas, research and insights, which can be helpful when choosing investments. Interactive Investor’s services include a Trading Account, Stocks and Shares ISA, SIPP and Junior ISA.
Capital at risk.
AJ Bell is one of the UK’s largest online investment platforms, and its mission is to make investing as easy as possible for anyone. The platform offers thousands of investment options for the DIY investor, including shares, funds, bonds, investment trusts, ETFs, ETCs, and warrants.
There are multiple ways to get started with AJ Bell, depending on your risk tolerance and investing savviness. Beginner investors or those who prefer to choose a ready-made investment portfolio can get a little, or a lot, of help from AJ Bell’s specialists by selecting one of the investment ideas on offer. Investment ideas are diversified ready-made baskets of investments that you can select based on your personal preference and attitude to risk. There are eight total investment ideas, each built by a specialist team, and you can pick the right one for you depending on whether you are seeking to simply grow your money over time or receive an income whilst still growing your money. Expert investors can take advantage of the stock and fund screeners and complex instruments available on AJ Bell and build their portfolios themselves.
AJ Bell charges an annual platform fee ranging from 0.25% to 0% depending on the size of your portfolio. Dealing fees for buying and selling investments online are £1.50 for funds and £9.95 for shares (reducing to £4.95 if there were 10 or more online share deals in the previous month). AJ Bell’s products include a Share Dealing Account, Stocks and Shares ISA, Junior Stocks and Shares ISA, Lifetime ISA, SIPP and Junior SIPP.
Capital at risk.
Bestinvest is a UK low-cost investment platform that allows you to trade or invest in over 3,000 instruments, including shares, funds, ETFs, and investment trusts. With Bestinvest, you can build an investment portfolio in two ways depending on your personal preferences, goals and attitude to risk.
Beginners or those who prefer a ready-made investment can build their portfolio by selecting one of Bestinvest’s ready-made investment portfolios. These off-the-shelf style portfolios are created and managed by the team at Bestinvest and come with a carefully selected and diversified collection of investments. Once you have picked one, you do not need to do anything else. There are three ranges to choose from: Expert, Smart and Direct, depending on whether you want to maximise the returns for the risk you take, focus on cost-efficiency or focus on individual investments. The team at Bestinvest will walk you through the process of selecting a ready-made portfolio. Advanced or more confident investors can choose from a wide range of funds, shares, ETFs and ITs and build their portfolios themselves.
To start building your portfolio with Bestinvest, you can deposit a lump sum or set up a monthly savings plan (which allows you to automatically save or invest a set amount into your investment account every month). There are no set-up fees or fund dealing charges with Bestinvest. Bestinvest charges an annual platform fee ranging from 0.40% to 0% for DIY investing and 0.20% to 0% for ready-made investing. The dealing fee for buying and selling shares online is £4.95 per deal. Bestinvest’s suite of products includes a Stocks and Shares ISA, Junior Stocks and Shares ISA, General Investment Account, SIPP and Junior SIPP.
Capital at risk.
Hargreaves Lansdown, a FTSE 100 company and the UK’s largest investment platform, is the best share dealing account in the UK. Although not the cheapest, it compensates with unrivalled stock research and trading tools, prioritising long-term client relationships and financial security. There is almost no stock, fund or investment trust you cannot find on Hargreaves Lansdown, along with detailed information on fund composition, performance data and advanced charting. With Hargreaves Lansdown, you can access over 15,000 instruments, encompassing over 2,500 funds, UK and overseas shares, bonds, ETFs, ETCs, investment trusts and more.
With Hargreaves Lansdown, you can build your investment portfolio in three ways. You can pick your own investments to match your values and goals, select ready-made portfolios, or pay a financial adviser to choose investments for you. The ready-made portfolios can be used as all-in-one investments. Pick one from the different risk levels, and you are good to go. You will still have to monitor your portfolio as with any other investment. If you pay for financial advice, the specialist investment adviser will recommend a suitable portfolio of investments for your goals and ensure that your portfolio is cost-effective, well-balanced, diversified, and ideal for your stage in life. Advanced or more confident investors who want to pick their own investments can choose from a wide range of funds, shares and other investments and build their portfolios themselves.
Hargreaves Lansdown does not charge a platform fee on its Fund and Share Account but charges 0.45% (capped at £45) a year on its ISA and 0.45% (capped at £200) a year on its SIPP. It offers most products, including a Fund and Share Account, Stocks and Shares ISA, Lifetime ISA, Junior ISA, and SIPP. These services are intended for investors who are happy making their own decisions.
Please note: Your capital is at risk. The fees quoted here are not exhaustive. Other charges apply.
Freetrade, widely recognised as one of the best stock trading apps in the UK, is a mobile trading app that gives you access to thousands of UK and overseas stocks, ETFs, REITs, and investment trusts covering different sectors and markets worldwide. The Freetrade app can be accessed on iOS, Android and desktop devices and offers a slick and easy-to-use user interface and experience. The app is a great choice for both beginners and experienced investors.
With Freetrade, you can invest in fractional shares of even the most expensive US shares with as little as £2. Depositing, trading and withdrawing on Freetrade are commission-free (other charges may apply). FX rates apply to US stocks at the spot rate + 0.45%. To get the most out of Freetrade, you can choose from three subscription plans. The Basic Plan costs £0.00 per month and allows you to open a General Investment Account (GIA) and trade commission-free. The Standard Plan costs £4.99 per month and allows you to open a Stocks and Shares ISA in addition to your GIA. With the Plus Plan at £9.99 a month, you get a Self-Invested Personal Pension (SIPP) and a Stocks and Shares ISA in addition to your GIA. Dealing on Freetrade is commission-free irrespective of the subscription plan you choose. Freetrade’s suite of products includes a Stocks and Shares ISA, General Investment Account (GIA) and SIPP.
Promo: Get a free share worth £10 when you join Freetrade and fund your account with at least £50.
Please note: When you invest, your capital is at risk. The value of your investments can go down as well as up, and you may get back less than you invest. ISA rules apply. SIPP eligibility and tax rules apply. Free share terms and conditions apply.
InvestEngine is a low-cost ETF investment platform that provides a choice of managed portfolios tailored to you and commission-free DIY investing to help you build long-term wealth. Users can invest in over 500 exchange-traded funds (ETFs) from leading global asset managers.
With InvestEngine, you can invest in two ways depending on your tolerance for risk and savviness as an investor: beginner investors or those who prefer a ready-made investment portfolio can select from one of the managed portfolios on offer, where the team of experts at InvestEngine will take care of the day-to-day investment decisions for you. These portfolios are a selection of ETFs based on your preferences and risk tolerance. Once you’ve selected one, you do not have to do anything else besides monitor the performance of your investments. Advanced or more confident investors can choose from 500+ commission-free ETFs and build their portfolios themselves. InvestEngine also offers fractional investing, which allows you to buy bits and pieces of an ETF with as little as £1. This enhances your ability to build a diversified portfolio even if you have a small amount of money to invest. With the DIY Portfolio, there are no platform fees. However, the managed portfolios attract a fee of 0.25% per year. All InvestEngine portfolios are free of set-up fees, dealing fees, ISA subscription fees or withdrawal fees.
InvestEngine stands out amongst its competitors as one of the cheapest trading platforms in the UK because it charges no platform or management fees on its DIY Portfolio and just 0.25% a year on its managed portfolio. You can also start investing with as little as £100. InvestEngine’s suite of products includes a Stocks and Shares ISA, Personal Account and Business Account.
Capital at risk.
Moneybox is a UK investment app that allows you to invest in a range of tracker funds, exchange-traded funds (ETFs), exchange-traded commodities (ETCs) and US stocks. Moneybox offers two forms of investing depending on your investing savviness, investing strategy and attitude to risk. Beginner investors or those who prefer a ready-made portfolio can choose from the three ready-made portfolios on offer - Cautious (lower risk), Balanced (medium risk) and Adventurous (higher risk). Advanced or more confident investors can pick from the range of tracker funds, ETFs, ETCs and US stocks available and build their portfolios themselves.
The Moneybox app also empowers you to invest your spare change by rounding up your card transactions to the nearest pound and investing the difference on your behalf. For example, if you spend £2.30 on a snack, Moneybox will invest 70p for you. You can also instruct the app to make weekly or one-off deposits into your investment portfolio as it rounds up your spare change.
You can start investing with Moneybox with as little as £1. Moneybox offers commission-free trading on US stocks. However, fund management fees apply to other types of investments ranging from 0.12% to 0.61% per annum. A currency conversion fee of 0.45% also applies to US stocks. Moneybox also charges an annual platform fee of 0.45% and a monthly subscription fee of £1 (you get the first three months free). Moneybox’s suite of products includes a Stocks and Shares ISA, Lifetime ISA, Junior ISA, Personal Pension, and General Investment Account.
Capital at risk.
Plum is a UK money management and investment app that helps you manage your money and build an investment portfolio. With Plum, you can invest in up to 21 funds and over 3,000 UK and overseas stocks. Plum also offers ethical or ESG investment options for those who want to invest in line with their values.
The Plum app empowers you to invest your spare change by rounding up your card transactions to the nearest pound and investing the difference on your behalf. For example, if you spend £1.20 on a snack, Plum will invest 80p for you. The app also calculates how much you can afford to set aside and invests it automatically once a week.
You can start investing with Plum with as little as £1. Plum charges a monthly subscription fee ranging from £2.99 to £9.99 per month; you get the first month free. Stock trading on Plum is commission-free (other charges may apply). FX rates also apply to US stocks at the spot rate + 0.45%. The average annual fund management fee across all funds offered is 0.39%. Plum’s suite of products includes a Stocks and Shares ISA, General Investment Account and Personal Pension.
Capital at risk.
Oil trading is the process of buying and selling crude oil and its derivatives with the aim of profiting from price fluctuations in the market. In the UK, traders and investors typically engage in oil trading through three primary methods: oil spot prices, oil futures, and oil options. Let’s take a closer look at each of these approaches.
The oil spot price represents the current market price for immediate delivery and settlement of crude oil. Traders can speculate on spot price movements by using financial instruments like Contracts for Difference (CFDs) and spread bets.
These allow you to trade on the price difference between the opening and closing positions without actually owning the underlying asset. They are leveraged products, meaning you only need a small deposit (margin) to control a larger position, amplifying both profits and losses.
Oil futures are contracts that oblige the buyer to purchase a specific amount of oil at a predetermined price on a future date. These contracts are traded on exchanges, and their prices fluctuate based on factors like supply and demand, geopolitical events, and economic data.
Traders can profit from these price changes by buying and selling futures contracts, often using leverage to maximise their exposure to the market.
Oil options are contracts that grant the holder the right (but not the obligation) to buy or sell a specific amount of oil at a predetermined price within a certain time frame. These contracts can be traded on exchanges, similar to futures contracts.
Options trading can offer more flexibility than futures, as traders can choose whether or not to exercise their contracts depending on market conditions. Like futures and CFDs, options can also be traded with leverage, increasing both potential gains and losses.
You can trade crude oil directly by speculating on the spot prices or indirectly by trading shares in oil companies such as BP, Shell, and ExxonMobil, trading oil-focused exchange-traded funds (ETFs) or mutual funds, trading oil futures or options, and investing in Master Limited Partnerships (MLPs).
Here is a breakdown of how to trade crude oil:
Deciding which oil shares to buy can be daunting for the first-time investor or trader, but it need not be. Below, we have summarised our top ten oil stock-picking methods for would-be traders.
Follow the steps below to learn how to pick oil stocks:
The initial step to picking oil stocks is to determine and establish clear goals for your portfolio. You need to ask yourself why you are trading oil stocks and state explicitly what you hope to achieve.
There are three key goals to consider, and you can focus on just one, two or a combination of all three. When picking oil stocks, you need to ask yourself if you are in it to:
Your goal determines your eventual investment strategy. For example, if your trading goal is to generate a regular income, you might be interested in oil stocks with high dividend yields. You might also consider bonds and real estate investment trusts (REITs) within the energy sector.
A trader whose goal is wealth preservation is naturally risk-averse and might prefer to invest in stable blue-chip oil company stocks. These include stocks on indices such as the Dow 30, S&P 500 or the FTSE 100.
Similarly, traders looking to grow wealth might focus on small to mid-cap oil stocks in their early growth years with promising financials and technicals. These types of stocks are usually riskier than their large-cap counterparts as they tend to be less liquid.
To become an excellent trader or investor, you must constantly research the markets and keep on top of the technicals and fundamentals of each oil stock you are trading.
The best places to find charts for technical analysis are on charting and trading websites such as TradingView, Investors Business Daily’s MarketSmith, Nasdaq and the London Stock Exchange.
The best places to find data for fundamental analysis, macroeconomic updates, earnings releases and analyst commentary include news sites such as CNBC, The Financial Times, and Investors Business Daily.
Twitter accounts and popular trading blogs such as @WatcherGuru, @unusual_whales, and @MarketWatch are also very helpful.
Additionally, email newsletters such as the daily one by Stocktwits are simply excellent.
Finally, at Koody, we recommend reading William J. O’Neil’s How to Make Money in Stocks before trading or investing in individual stocks.
Once an oil company completes its IPO, the share price will be determined by factors such as supply and demand. There are a variety of factors that affect the supply and demand for an oil company’s stock over time, including:
When you study oil stock price-volume charts, you discover patterns that help you predict price movements. According to William J. O’Neil, “it is the unique combination of finding stocks with big increases in sales, earnings and return on equity plus strong chart patterns revealing institutional buying that together will materially improve your stock selection and timing. The best professionals use charts.”
When reading charts, you want to focus on the daily, weekly, and yearly price-volume actions. There is a wide range of technical indicators and oscillators you can use when working with oil stock charts, including moving averages, stochastic oscillators, moving average convergence divergence (MACD), standard deviation, Bollinger bands, relative strength index (RSI), Fibonacci retracement, among others.
The global economy will grow and shrink over time. When the economy is growing, most sectors tend to do well. But when the economy is shrinking and things are not as rosy, only certain sectors continue to do well.
Industries that are more resistant to economic downturns, such as oil, tend to fare better during recessions. Understanding these cycles can help you decide what oil shares to buy and when.
If you can predict how the world will change in the next 10 to 20 years and what industries and companies are poised to benefit from this change, you can begin to invest in oil stocks accordingly.
For example, how will the global energy landscape evolve over the next 10 to 20 years? What changes do you anticipate in the oil industry as a result of climate change, technological advancements, and geopolitical shifts? Which oil companies stand to benefit most from these changes?
This type of analysis should form the basis behind every oil stock you choose to invest in. A thoughtful investor has a “story” that explains every decision behind a stock pick.
When picking oil stocks, it is crucial to look for leading companies with solid financials. Leading companies are not necessarily popular brands or household names but companies that are number one in their industry or sector from a fundamental and technical analysis standpoint.
Leading oil companies are the best-performing stocks according to the highest quarterly and annual earnings growth, highest return on equity, widest profit margins, strongest sales growth, and excellent price-to-earnings (P/E) ratios.
To identify oil companies with healthy financials, you might need a stock screener to filter based on specific criteria such as earnings per share (EPS) growth, revenue growth, market capitalisation, P/E ratio, sector, dividend yield, and other metrics. The best oil trading platforms in the UK will offer stock screeners as part of their in-house trading software or allow you to connect to advanced third-party trading software with stock screeners, such as TradingView.
When you start researching the oil markets, you will quickly come to see how much analyst forecasts and recommendations affect short-term share price movements.
While it is important to pay attention to analyst forecasts and commentary, you should not obsess over them but instead, try to form your own opinions.
Spend time reading macroeconomic and microeconomic news, company-specific news, trading blogs, and opinion pieces to better understand the oil markets. This, in addition to fundamental and technical analysis of an oil stock, should help you form your own opinion, create your “story”, and make a sensible purchase.
When picking oil shares, it is risky to invest in just one company. If the company gets into difficulty, you could lose all you invested. It is better to build a diversified portfolio.
Building a diversified portfolio means you should consider investing in multiple oil companies, across different industry segments and in various geographies. A combination of blue-chip oil stocks, high-growth companies, and dividend oil stocks across a variety of industry sectors and geographies provide the ultimate diversification for an oil stock portfolio.
A simple and easy way to diversify your oil portfolio is to invest in oil-focused mutual funds and ETFs. Mutual funds and ETFs save you the trouble of buying shares in multiple oil companies or worrying about building a diversified portfolio. They are also safer and cheaper than buying individual oil stocks since you share the risks and costs with other investors. Most people, including experienced investors, use funds when investing.
Once you’ve done all of the above and have your strategy in place, the key is to stick to it. Investing can be highly emotional at the best of times, and this is particularly true with an intense, high-paced approach such as margin trading.
It is important to review the success or failures of the strategy being implemented, but this should be done outside of trading hours when emotions can be somewhat removed from the process.
In conclusion, picking oil stocks can be a rewarding venture if you approach it with a clear strategy and focus on research, diversification, and discipline. By following these steps, even novice investors can build a successful oil stock portfolio and work towards their financial goals.
To trade oil stocks in the UK, you need to open a trading account and buy and sell oil company shares with brokers such as eToro, AJ Bell, and Interactive Investor.
Trading oil stocks can yield either profitable or unrewarding results, depending on your level of trading knowledge and aptitude as an investor. Thus, it is essential that you comprehend the inner workings of this particular market, including the potential risks and rewards, before venturing into it.
Follow the steps below to learn how to trade oil stocks:
This exciting new age of investing offers a wealth of opportunities, as well as challenges, for those looking to balance profits with social responsibility.
In this section, we’ll discuss environmental concerns, socially responsible investing, and emerging opportunities in the energy sector.
The oil industry has long been associated with significant environmental concerns, from greenhouse gas emissions to the devastating effects of oil spills. As climate change becomes an increasingly pressing issue, governments and consumers are pushing for a shift towards renewable energy sources, such as solar, wind, and hydroelectric power.
As an investor, it’s crucial to stay ahead of this trend and consider the long-term viability of oil stocks. For example, BP, a major oil and gas company, has been investing in renewable energy projects to reduce its carbon footprint and diversify its energy portfolio.
By keeping an eye on such initiatives, you can make informed decisions about which oil stocks are most likely to adapt and thrive in a changing energy landscape.
Socially responsible investing (SRI) involves selecting investments based on their environmental, social, and governance (ESG) performance. Many investors are increasingly prioritising SRI, seeking to align their portfolios with their values and contribute to a more sustainable future.
As a savvy investor, you may want to explore SRI funds or ETFs that focus on clean energy or companies with strong ESG performance. For example, the iShares Global Clean Energy ETF (INRG) invests in a diversified portfolio of clean energy companies, providing exposure to this growing sector while adhering to ethical considerations.
The energy sector is evolving rapidly, offering new opportunities for forward-thinking investors. Companies developing innovative technologies, such as hydrogen fuel cells, electric vehicles, and battery storage, present potential investment options as the world moves towards cleaner energy solutions.
One such example is Tesla ($TSLA), the electric vehicle manufacturer that has made significant strides in battery technology and renewable energy solutions. By investing in companies like Tesla, you can not only support the transition to a more sustainable energy future but also potentially benefit from the growth in this emerging sector.
The taxes you pay when you buy and sell oil stocks in the UK are the same as when you buy any company stock.
Here is a breakdown of the taxes on stocks and shares in the UK:
When you buy UK shares electronically, you will pay a 0.5% Stamp Duty Reserve Tax (SDRT) to the government.
If you purchase UK shares using a stock transfer form, you will pay Stamp Duty if the transaction is over £1,000.
Stamp Duty on Irish registered stocks is 1%.
You do not pay Stamp Duty on AIM stocks or Exchange-Traded Funds (ETFs).
When you sell shares or other investments, irrespective of the country where the shares are registered or the currency the shares are denominated in, you may have to pay Capital Gains Tax if you make a profit.
You may have to pay tax on the following:
You only have to pay Capital Gains Tax on your overall gains above your tax-free allowance.
This tax year, the Capital Gains tax-free allowance is £12,300 (£6,150 for trusts). This means you may not have to pay tax on the first £12,300 profit you make from selling your stocks and shares.
Additionally, the first £2,000 you receive in dividend payments is tax-free. Visit GOV.UK for more information on the tax on dividends and the dividend allowance.
You may also be able to reduce your tax bill by deducting losses or claiming reliefs - this depends on the asset. Another way to limit your tax bill is by trading certain kinds of leveraged products. Please speak to your tax adviser for more information. Also, visit GOV.UK for more on Capital Gains Tax allowances.
As you dive into the thrilling world of oil investing, it is essential to familiarise yourself with some key terminologies. So, here’s a list of 20 important oil trading terms every young investor should know:
Here are the best crude oil trading apps in the UK:
Investing in oil wells involves purchasing a working interest or a stake in an active oil well. You can invest in oil wells by partnering with existing oil exploration and production companies or joining investment groups that pool resources to invest in oil wells.
To invest in oil futures, you’ll need to open an account with a broker that offers access to futures markets, such as Saxo and DEGIRO. You can then purchase futures contracts, which are agreements to buy or sell a specific amount of oil at a predetermined price on a future date.
To invest in oil stocks, you’ll need to open an account with a stockbroker. You can then purchase shares of oil companies, ranging from major integrated firms such as BP (UK), Royal Dutch Shell (UK/Netherlands), ExxonMobil (US), and TotalEnergies (France) to smaller exploration and production companies such as Tullow Oil (UK), Harbour Energy (UK), Diamondback Energy (US) and Vermilion Energy (Canada).
Crude oil trading can be profitable due to price volatility and the potential for significant price movements. However, it’s essential to have a solid understanding of the market, a well-developed trading strategy, and proper risk management techniques.
Trading commodities involves buying and selling raw materials and primary goods, such as oil, gold, and agricultural products. Commodity trading is typically done through futures contracts, which are agreements to buy or sell a specific quantity of a commodity at a predetermined price on a future date.
Oil is valuable because it is a major global energy source used for transportation, heating, electricity generation, and as a raw material for various industrial products. Its high demand and limited supply make it a valuable commodity in the global market.
The majority of oil is traded in US dollars, as it’s the world’s primary reserve currency. However, other currencies, such as the euro or yuan, can also be used in some transactions.
Oil trading hours vary depending on the specific market and instrument being traded. For example, NYMEX WTI crude oil futures trade from Sunday to Friday, 6:00 p.m. to 5:00 p.m. Eastern Time, with a one-hour break each day. Meanwhile, ICE Brent crude oil futures trade from Sunday to Friday, 8:00 p.m. to 6:00 p.m. London Time, with a one-hour break at 11:00 p.m. London Time each day.
The most commonly traded commodities include crude oil, gold, silver, copper, natural gas, and agricultural products such as corn, soybeans, and wheat. These commodities are traded on various exchanges worldwide, including the London Metal Exchange (LME), the New York Mercantile Exchange (NYMEX), and the Chicago Board of Trade (CBOT).
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