Best Oil Trading Platforms

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Contents:

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We’ve compiled a list of the best oil trading platforms in the UK. These are our top oil trading platforms for buying and selling oil company shares, mutual funds, ETFs, spot prices, futures, and options.

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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.

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Here are the best oil trading platforms in the UK:

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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.

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1. Oil Spot Prices

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.

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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.

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2. Oil Futures

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.

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Traders can profit from these price changes by buying and selling futures contracts, often using leverage to maximise their exposure to the market.

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3. Oil Options

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.

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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.

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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).

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Here is a breakdown of how to trade crude oil:

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1. Trade Shares in Oil Companies, ETFs, and Funds

1. Trading Oil Company Shares: One popular method of crude oil trading is speculating on the stocks of oil companies. By doing so, you can capitalise on the oil industry’s short-term price movements.
   
   Examples of oil companies you might trade include industry giants like BP, Shell, and ExxonMobil. You can trade oil company shares in the UK on investment platforms such as XTB, eToro, and Interactive Investor.
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2. Exchange-Traded Funds (ETFs): ETFs are another avenue for trading crude oil. By speculating on the shares of an ETF that tracks the performance of oil-related assets, you can gain broad exposure to the oil market with a single investment.
   
   Some oil ETFs track the underlying oil price, such as the WisdomTree Brent Crude Oil ETC (BRNG), while others track a group of oil companies’ shares, such as the iShares S&P 500 Energy Sector UCITS (IESU).
   
   You can trade oil ETFs in the UK from brokers such as XTB, eToro, and Interactive Investor.
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3. Mutual Funds: Similar to ETFs, mutual funds offer a diversified approach to trading crude oil. These funds invest in a basket of oil and energy-related stocks, providing broad exposure to the sector.
   
   Examples of oil-focused mutual funds in the UK include the TB Guinness Global Energy Fund and the BGF World Energy Fund.
   
   You can trade oil mutual funds in the UK from stockbrokers such as AJ Bell, Interactive Investor, and Saxo.

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2. Trade Crude Oil Spot Prices

1. What Is a Spot Price? A spot price refers to the current market price of a commodity, such as crude oil, at which it can be bought or sold for immediate delivery. Spot prices are influenced by various factors, including supply and demand, geopolitical events, and economic indicators.
   
   
2. How to Trade Crude Oil Spot Prices in the UK: In the UK, you can trade crude oil spot prices through a broker that offers access to the commodities market, such as XTB, Pepperstone, and CMC Markets.
   
   To trade crude oil spot prices, you can use instruments such as Contracts for Difference (CFDs) or spread bets, which allow you to speculate on price fluctuations without owning the underlying asset. It is essential to understand the mechanics of these instruments and be aware of the risks associated with trading crude oil spot prices before diving in.
   
   
3. Pros and Cons of Trading Crude Oil Spot Prices: Trading crude oil spot prices can be an exhilarating way to gain exposure to the oil market and potentially profit from short-term price fluctuations.
   
   Some advantages of trading spot prices include the ability to trade on margin, the absence of expiry dates (compared to futures contracts), and the opportunity to profit from both rising and falling markets.
   
   However, it is important to note that trading crude oil spot prices carries risks, such as the potential for significant losses due to the use of leverage, as well as the volatile nature of oil prices. Additionally, trading spot prices is typically more suited for short-term trading strategies and may not be ideal for long-term investments.

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3. Trade Crude Oil Futures and Options

1. What Are Crude Oil Futures and Options? Futures and options are financial instruments that allow you to speculate on the future price of crude oil.
   
   Crude oil futures contracts are agreements to buy or sell a specific amount of oil at a predetermined price on a future date.
   
   Options, on the other hand, give you the right (but not the obligation) to buy or sell oil at a specific price within a certain time frame.
   
   Options and futures are quite similar, with the key difference being that with options, there is no obligation to buy or sell the oil at the contract’s expiry date if you do not want to.
   
   
2. How to Trade Crude Oil Futures and Options in the UK: In the UK, you can trade crude oil futures and options through a broker that offers access to these markets, such as Saxo. Before diving in, ensure you have a solid understanding of the mechanics and risks involved in trading futures and options.

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3. Pros and Cons of Trading Crude Oil Futures and Options: Trading crude oil futures and options can be an exciting and potentially lucrative endeavour. However, it is essential to be aware of the risks associated with these instruments, such as significant loss of funds. Crude oil options and futures are also very complex instruments and may not be suitable for all traders.

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4. Invest in Master Limited Partnerships (MLPs)

1. What are MLPs? Master Limited Partnerships (MLPs) are publicly traded investment vehicles in the US that primarily invest in energy infrastructure assets such as pipelines, storage facilities, and refineries. These partnerships typically generate stable cash flows and offer attractive yields through regular distributions to their unit holders.
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2. How to Invest in MLPs from the UK: Investing in MLPs from the UK is fairly straightforward, as most major trading platforms and brokers offer access to US-listed MLPs.
   
   To get started, open a trading account with a broker such as XTB, eToro, or Interactive Investor. Next, analyse potential MLP investments by reviewing financial statements, distribution history, and the underlying energy infrastructure assets. Popular MLPs include Enterprise Products Partners ($EPD), Magellan Midstream Partners ($MMP), and Energy Transfer ($ET).
   
   Once you’ve decided on the MLP you’d like to invest in, place a buy order through your broker’s trading platform.
   
   
3. Pros and Cons of Investing in MLPs: Investing in MLPs offers attractive yields and tax benefits, making them an appealing option for income-focused investors. However, they also come with complexities due to unique tax implications and additional paperwork for UK investors.
   
   Additionally, MLPs are primarily focused on the energy sector, making them susceptible to fluctuations in oil and gas prices. It’s crucial to carefully research and understand the specific MLPs you’re interested in before making a decision.

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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.

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Follow the steps below to learn how to pick oil stocks:

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1. Set Your Goals
2. Find Sources for Technical and Fundamental Analysis
3. Understand Market Drivers
4. Learn How to Read Charts
5. ‍Study Economic Cycles
6. Become Comfortable Predicting the Future 
7. Look for Leading Oil Companies With Healthy Financials
8. Do not Obsess Over Analyst Recommendations or Predictions
9. Build a Diversified Portfolio
10. Avoid Emotions and Stick to Your Rules

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1. Set Your Goals

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.

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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:

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1. Generate a regular income,
2. Preserve existing wealth, or
3. Amass wealth.

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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.

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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.

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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.

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2. Find Sources for Technical and Fundamental Analysis

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.

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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.

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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.

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Twitter accounts and popular trading blogs such as @WatcherGuru, @unusual_whales, and @MarketWatch are also very helpful. 

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Additionally, email newsletters such as the daily one by Stocktwits are simply excellent.

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Finally, at Koody, we recommend reading William J. O’Neil’s How to Make Money in Stocks before trading or investing in individual stocks.

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3. Understand Market Drivers

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:

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1. Macroeconomic Data: The global economy and the economy where an oil company operates can affect its growth. Data releases such as gross domestic product (GDP), interest rates, inflation data, jobs reports, and currency fluctuations can all affect an oil company’s performance and, subsequently, its share price.
   
   Oil prices, geopolitical events, and global energy policy can also influence the value of oil stocks. Positive macroeconomic data can cause the share price to rise, while negative or weak data can cause it to drop. You can find these kinds of data on government-owned statistics websites or financial news websites.

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2. Company-Specific Data: Quarterly and yearly earnings reports, news on leadership changes, new project announcements, corporate press releases and investor presentations can all affect the price of an oil company’s share.
   
   Reports and investor presentations typically contain forward-looking information on the expected direction of the company and its industry, which can affect the company’s share price. You can find this kind of information on the company’s website.

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3. Market Sentiment: How the public feels about the company’s projects, policies, and general direction can also affect the company’s share price.

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4. Institutional Sponsorship: This refers to the number of big funds and institutional investors buying the company’s stock. Oil stocks with large institutional sponsorship tend to be more liquid than those without substantial institutional support.

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5. Market Direction: A bull or bear market will affect oil share prices and general market direction. During a bull run, oil stocks tend to perform well. The opposite is the case in a bear market.

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4. Learn How to Read Charts

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.”

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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.

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5. Study Economic Cycles

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.

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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.

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6. Become Comfortable Predicting the Future

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.

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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?

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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.

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7. Look for Leading Oil Companies With Healthy Financials

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.

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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.

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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.

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8. Do not Obsess Over Analyst Recommendations or Predictions

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.

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While it is important to pay attention to analyst forecasts and commentary, you should not obsess over them; instead, try to form your own opinions.

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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.

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9. Build a Diversified Portfolio

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.

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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.

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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.

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10. Avoid Emotions and Stick to Your Rules

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.

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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.

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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.

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To trade oil stocks in the UK, you’ll need to open a trading account and buy and sell oil company shares with brokers, such as XTB, eToro, and Interactive Investor.

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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.

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Follow the steps below to learn how to trade oil stocks:

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1. Learn Oil Trading Terminology: Trading oil stocks in the UK requires specialised knowledge of the terms used and an understanding of how the oil market operates.
   
   To thrive as a trader, one must grasp trading terminologies such as ask and bid prices, leverage ratios, price-volume action, fundamental analysis, technical analysis, bear and bull markets, lot sizes, margins, spots, forwards and futures markets, day trading, swing trading, scalping, going short, going long, and more – all with a focus on the oil sector.

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2. Decide on Your Trading Strategies: Numerous strategies can be employed when trading oil stocks. Some will concentrate purely on technical analysis, basing investment decisions on the movement of the stock price on a chart.
   
   Others will focus more on fundamental analysis, monitoring the oil company’s website, social media, and news cycles to capitalise on news and announcements that could affect an oil stock price. Most traders utilise a combination of both strategies, while some rely on alternative methods like AI-based algorithmic trading.

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3. Create a Trading Plan: Crafting a trading plan before diving into the market can prove advantageous. An effective trading plan outlines your ideal trade, desired profit, acceptable loss, and risk management strategies, all tailored to the oil sector.

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4. Consider Trading Fees Carefully: Trading oil stocks in the UK involves various costs. The main ones are the annual platform fee, dealing fee (or brokerage commission), foreign exchange fee, stamp duty, spread, overnight fee, transfer-out fee, and inactivity fee. The specific fee you incur will depend on the trading platform you choose.
   
   
5. Choose a Tax Wrapper: A tax wrapper reduces the taxes you pay on the gains from your savings and investments. Examples of tax wrappers in the UK are individual savings accounts (ISAs) and pensions.
   
   If you prefer not to use a tax wrapper, perhaps because you have already exhausted your ISA allowance for the tax year, you can opt for a general investment account (GIA), which also offers some tax benefits. We delve into taxes and tax allowances in greater detail below.

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6. Open a Trading Account: Once you have devised a trading plan, honed a strategy, and learnt essential terminologies, it is time to open a trading account. This is the straightforward part.
   
   Visit any of the trading platforms mentioned above, provide a few personal details, verify your personal information, add a payment method, and fund your account. Always ensure that the Financial Conduct Authority (FCA) regulates the oil trading platform you register with. All trading platforms listed on Koody are FCA-regulated.
   
   

7. Choose Your Trading Software: There is a wide range of trading software to choose from. Many of the best oil trading platforms in the UK offer their proprietary software, which can be highly effective and cater to all your trading needs. Examples include xStation 5 by XTB and SaxoTraderGO by Saxo.
   
   Others, such as Pepperstone, allow you to choose from a range of popular third-party trading software depending on your trading needs and skills. Examples of such trading software include MetaTrader 4 (MT4), MetaTrader 5 (MT5), CTrader, TradingView, DupliTrade (for social and copy trading), and Capitalise AI (for code-free trading automation). The trading software you select will be connected to your trading account.

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8. Choose Your Market: There are several markets to trade in, including oil stocks, ETFs, bonds, indices, futures, options, and more. You can focus solely on oil stocks or diversify across multiple markets.

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9. Open a Position: If you think the price of an oil stock will rise, you can open a buy position, called “going long”. Conversely, if you believe the price of an oil stock will decline, you can open a sell position, called “going short”.

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10. Monitor Your Trades and Close Your Position: Trading oil stocks differs from long-term investing in an index fund or a ready-made portfolio. You must continually monitor your trades and implement relevant risk management strategies to help limit your losses. When satisfied with your profits, close your position to minimise losses and avoid fees such as overnight fees or stop loss premiums.

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11. Stay Informed About the Oil Market: The oil market is highly sensitive to geopolitical events, economic factors, and global supply and demand. As an oil stock trader, it is crucial to stay informed about these factors and how they affect oil prices.
    
    Keep an eye on industry news, OPEC decisions, and major developments in the energy sector. This knowledge will enable you to make informed trading decisions and anticipate market movements.

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12. Diversify Your Portfolio: While focusing on oil stocks can be lucrative, it is wise to diversify your portfolio to mitigate risks. Consider investing in other sectors, such as technology, healthcare, and renewable energy, to create a balanced investment portfolio.

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This exciting new age of investing offers a wealth of opportunities, as well as challenges, for those looking to balance profits with social responsibility.

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In this section, we’ll discuss environmental concerns, socially responsible investing, and emerging opportunities in the energy sector.

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1. Environmental Concerns and the Shift Towards Renewable Energy

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.

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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.

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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.

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2. Socially Responsible Investing

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.

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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.

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3. Emerging Opportunities in the Energy Sector

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.

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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.

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The taxes you pay when you buy and sell oil stocks in the UK are the same as when you buy any company stock.

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Here is a breakdown of the taxes on stocks and shares in the UK:

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1. Tax When You Buy UK Shares: Stamp Duty Reserve Tax (SDRT)

When you buy UK shares electronically, you will pay a 0.5% Stamp Duty Reserve Tax (SDRT) to the government.

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If you purchase UK shares using a stock transfer form, you will pay Stamp Duty if the transaction is over £1,000.

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Stamp Duty on Irish registered stocks is 1%.

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You do not pay Stamp Duty on AIM stocks or Exchange-Traded Funds (ETFs).

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2. Tax When You Sell All Shares: Capital Gains Tax (CGT)

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.

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‍You may have to pay tax on the following:

• Shares that are not in an ISA or PEP.
• Units in a unit trust.
• Certain bonds (not including premium bonds and qualifying corporate bonds).

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You only have to pay Capital Gains Tax on your overall gains above your tax-free allowance.

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This tax year, the Capital Gains tax-free allowance is £6,000 (£3,000 for trusts). This means you may not have to pay tax on the first £6,000 profit you make from selling your stocks and shares.

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Additionally, the first £1,000 you receive in dividend payments is tax-free. Visit GOV.UK for more information on the tax on dividends and the dividend allowance.

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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.

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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:

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1. Barrel (bbl): A unit of measurement for oil, equivalent to 42 US gallons (159 litres). For example, when the news reports that oil production has increased by 500,000 barrels per day, it means that production has gone up by 21 million gallons daily.
   
   
2. Brent Crude: A type of light, sweet crude oil from the North Sea used as a global benchmark for oil prices. When you hear someone say, “Brent Crude is trading at $80 per barrel,” they’re referring to this benchmark.
   
   
3. West Texas Intermediate (WTI): Another benchmark for oil prices, representing light, sweet crude oil produced in the United States. Similar to Brent Crude, WTI is widely used in oil trading and price determination.
   
   
4. OPEC: The Organization of the Petroleum Exporting Countries (OPEC) is a group of oil-producing nations that seeks to coordinate oil production policies and stabilise oil prices. Key members include Saudi Arabia, Iran, and Nigeria.
   
   
5. OPEC+: An alliance of oil-producing countries, including OPEC members and non-members like Russia, cooperating to manage oil production and stabilise global oil prices.
   
   
6. Crack Spread: The difference between the price of crude oil and the refined products (such as gasoline and diesel) derived from it. A wider crack spread indicates higher profits for refineries.
   
   
7. Contango: A market situation where the price of oil for future delivery is higher than the current (spot) price. This can signal an oversupply of oil or expectations of higher prices in the future.
   
   
8. Backwardation: The opposite of contango, where the price of oil for future delivery is lower than the current (spot) price. This can signal a shortage of oil or expectations of lower prices in the future.
   
   
9. Hedging: A risk management strategy used by oil producers and investors to protect against adverse price movements. For example, an oil producer may sell futures contracts to lock in a specific price for their oil, ensuring consistent revenue even if prices fall.
   
   
10. Futures Contract: A legal agreement to buy or sell a specific quantity of oil at a predetermined price and date in the future. Traders often use futures contracts to speculate on oil prices or hedge against potential price fluctuations.
    
    
11. Options Contract: A financial instrument that gives the buyer the right, but not the obligation, to buy or sell an underlying asset, such as oil, at a specified price and date. Options can be used for hedging or speculating on price movements.
    
    
12. Spot Price: The current market price at which a commodity, such as oil, can be bought or sold for immediate delivery. Spot prices are influenced by various factors, including supply, demand, and market sentiment.
    
    
13. Scalping: A short-term trading strategy targeting small price fluctuations. In oil trading, scalpers execute numerous quick trades, often within minutes or seconds, to gain low-margin profits.
    
    
14. Day Trading: A trading strategy that involves buying and selling oil futures contracts within the same trading day, aiming to capitalise on short-term price movements without holding positions overnight.
    
    
15. Swing Trading: Another trading strategy that focuses on capturing gains in oil prices over several days or weeks. Swing traders hold positions longer than day traders but generally shorter than long-term investors.
    
    
16. Margin: The amount of money required to open and maintain a position in the oil futures market. This can be a small percentage of the total contract value, allowing traders to leverage their capital and potentially earn significant returns.
    
    
17. Maintenance Margin: The minimum account balance that must be maintained when holding an open position in the oil futures market. If a trader’s account balance falls below this level, they may receive a margin call, requiring them to deposit additional funds or close their position.
    
    
18. Net Long/Short Position: The difference between the number of long (buy) and short (sell) positions held by a trader or an institution in the oil market. A net long position indicates a bullish outlook, while a net short position signals a bearish view.
    
    
19. Technical Analysis: A method of analysing oil price movements using historical price data, charts, and various indicators to identify patterns and trends. Technical analysis helps traders make informed decisions about future price movements.
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20. Fundamental Analysis: An approach to evaluating oil investments by examining the underlying factors that affect the supply and demand of oil, such as economic conditions, geopolitical events, and technological advancements.

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Here are the best crude oil trading apps in the UK:

1. XTB - Oil Share CFDs, ETF CFDs, and Spot Prices
2. Pepperstone - Oil Share CFDs, ETF CFDs, and Spot Prices
3. eToro - Oil Shares, ETFs, and CFDs
4. CMC Markets - Oil Share CFDs, ETF CFDs, Spot Prices, and Spread Bets
5. Saxo - Oil Shares, ETFs, CFDs, Spot Prices, Futures, and Options
6. Interactive Investor - Oil Shares and ETFs
7. AJ Bell - Oil Shares and ETFs‍
8. Freetrade - Oil Shares and ETFs

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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.

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To invest in oil futures, you’ll need to open an account with a broker that offers access to futures markets, such as Saxo. 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.

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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).

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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.

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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.

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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.

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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.

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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.

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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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