Investing in Oil

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chile_paul
chile_paul Posts: 412 Forumite
in Savings & investments
With Brent crude prices hitting a 5 and a half year low today I was wondering whether anybody was looking to invest in oil in the expectation that it will return to $100+ prices over the long term?

I'm thinking that for a small percentage of my portfolio (which I can afford to lose and would not need to access for 5-10 years) this may be a good investment?

I'd be interested in people's views and experiences and any guidance on the best way to do this - I know there are a number of funds that track commodities in general as well as ETF's. Any views on the best way to invest??
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  • Kendall80
    Kendall80 Posts: 965 Forumite
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    Its a tough one. Some are predicting $50 to $60 to become the 'new' norm whereas others suggest $90. I have gone for a relatively small investment in Tullow Oil. I may also invest in a hedged natural gas or brent crude ETF (ETFS) if prices dip even further.


    I am cautious regarding the amounts as I also hold Russia which can be viewed as a commodities play in itself.
  • inflationbuster
    inflationbuster Posts: 250 Forumite
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    I have been adding to my BP. holding which is yielding 6% right now.
  • jimjames
    jimjames Posts: 17,636 Forumite
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    There is a Junior Oils fund that may be suitable.

    As suggested you could also buy oil companies or country funds that are reliant on oil.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • colsten
    colsten Posts: 17,597 Forumite
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    jimjames wrote: »
    There is a Junior Oils fund that may be suitable.
    .

    Junior Oil - is that oil that isn't quite oil yet and needs a few more million years to become oil? As in you leave out an H or an F from this proper oil formula
    images?q=tbn:ANd9GcR6evUhRYkDg8hKzfYiMGsGndVWzLuunOJznh-_gPFnEESZ4V8G7w

    Seriously, what are Junior Oils funds?
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    inflationbuster wrote: »
    I have been adding to my BP. holding which is yielding 6% right now.

    Is the dividend sustainable at this level?

    Nor is BP clear of litigation in the US yet in relation to Deepwater Horizon. .
  • masonic
    masonic Posts: 23,345 Forumite
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    colsten wrote: »
    Junior Oil - is that oil that isn't quite oil yet and needs a few more million years to become oil? As in you leave out an H or an F from this proper oil formula
    images?q=tbn:ANd9GcR6evUhRYkDg8hKzfYiMGsGndVWzLuunOJznh-_gPFnEESZ4V8G7w

    Seriously, what are Junior Oils funds?
    You're more likely to find that in a cream, but if you're allergic to the commodities sector it might give you some relief.

    I think junior oils come from baby dinosaurs.
  • colsten
    colsten Posts: 17,597 Forumite
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    So what exactly are Junior Oils? I really do like to know.
  • irm
    irm Posts: 133 Forumite
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    colsten wrote: »
    So what exactly are Junior Oils? I really do like to know.

    Smaller, or emerging companies in the sector. I think.
  • masonic
    masonic Posts: 23,345 Forumite
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    I assume the fund invests in fledgling oil explorers and producers.
  • inflationbuster
    inflationbuster Posts: 250 Forumite
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    Thrugelmir wrote: »
    Is the dividend sustainable at this level?

    Nor is BP clear of litigation in the US yet in relation to Deepwater Horizon. .

    Both are indeed risks but BP did raise the dividend for third quarter despite lower oil prices.
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