Oil&Gas

Nurse2047

hi all
i only put a £5 into my Freetrade GIA a month as fun money, not a lot I know but I was  wondering what Oil/Gas companies would be worth buying a few shares of now before October? Other than BP/Exxon-Mobil? 

Daliah

Buying individual shares is a gamble. But if you just want to punt a fiver, pick any of them

Voyager2002

Oil and gas are making lots of money now, so the most likely movement in the price of their shares is downward. Unless your goal is to lose money, I suggest you seek to identify the sectors that will benefit from the way in which things are likely to change.

masonic

If you want a bit of a gamble, there are more exciting companies you could pick.

Dh6

For the sake of a fiver I’d put it on a horse or a football match. At least you find out if you’ve won or lost straight away!

wmb194

Dh6 said:

For the sake of a fiver I’d put it on a horse or a football match. At least you find out if you’ve won or lost straight away!

No, that's silly. You wouldn't lose all of it if you bought e.g., Shell and at least you might learn something from the ride.

wmb194

MFW2026 said:

hi all
i only put a £5 into my Freetrade GIA a month as fun money, not a lot I know but I was  wondering what Oil/Gas companies would be worth buying a few shares of now before October? Other than BP/Exxon-Mobil? 

Use Freetrade's "Energy" filter in the 'Discover' section and pick one but it also depends on what you want to achieve. You could buy another major like Shell or Chevron and earn some dividends and probably not lose all of your money, a riskier turnaround story like Harbour Energy (formerly Premier Oil) or you could pick one of the minnows and hope they strike it rich but if they don't you'll lose it all. Total is a popular major at the moment but Freetrade doesn't presently offer French shares or its US ADR.

The problem with only £5 is that if Freetrade doesn't offer fractional shares in the company you won't even be able to buy one unit e.g., Shell's shares currently trade at 2334p each + 0.5% SDRT.

Albermarle

wmb194 said:

Dh6 said:

For the sake of a fiver I’d put it on a horse or a football match. At least you find out if you’ve won or lost straight away!

No, that's silly. You wouldn't lose all of it if you bought e.g., Shell and at least you might learn something from the ride.

On the other hand you might back a 20/1 winner, and you would never see your Shell share go up 2000%.
Also £5 is a sensible amount to have a bet/some fun  with, whilst it is too small for buying shares, which as pointed out above are often more than £5 to buy.

wmb194

Albermarle said:

wmb194 said:

Dh6 said:

For the sake of a fiver I’d put it on a horse or a football match. At least you find out if you’ve won or lost straight away!

No, that's silly. You wouldn't lose all of it if you bought e.g., Shell and at least you might learn something from the ride.

On the other hand you might back a 20/1 winner, and you would never see your Shell share go up 2000%.
Also £5 is a sensible amount to have a bet/some fun  with, whilst it is too small for buying shares, which as pointed out above are often more than £5 to buy.

The chances are you won't, though. At least if you build a portfolio at £5pm over a long period of time you'll still have something at the end of it. Plenty of London listed shares are below £5 each and Freetrade offers fractional US shares. The OP can keep buying BP at 457p.

Actually, if you think betting is ever a good idea, given we're only talking about trivial amounts of money there's no reason not to place the £5 bet and buy a small quantity of shares.

bd10

Would that purchase be motivated by the looming spike in retail energy costs by any chance?

I am not so sure whether buying some oil/gas shares on the back of this for the following two reasons:

(1) We're seeing an economic slowdown, crude prices have come off from peak levels. EU nat gas prices are at record levels but the odds are the companies raking in the profits are either Russian or have close ties with Russia. Buying such shares would be really risky if possible at all. With the economic slowdown happening, I am not sure whether oil/gas and even mining/minerals will have much upside from current levels. Take Aussie Dollar for example which reflects copper prices and that is driven by Chinese demand. AUD has come off and so has copper. I think the oil/gas play was last year's play or rather part of the re-opening trade, starting when WTI traded in negative territory.

(2) Political risks. I don't mean European sanctions or Putin's next move, but rather local politics. For all the talk in the media, could we rule out a one-off tax of oil/gas profits by the new PM? Truss can say whatever she wants before being in office. This refusal of not doing XYZ right now is meaningless. If political pressure mounts, say we have a general strike, households defaulting or refusing to pay, if this situation gets worse - and I think it will get much worse - I would not rule out any political measures and energy companies might get stuffed with a levy. Less dividends at best, so that's bad news for the share price as these companies have been generous dividend payers.

If one is after dividends, I'd prefer to buy an UK equity income investment trust. The likes City of London or Claverhouse (or many others in that category), they paid their dividends right through the pandemic from their reserves. Added benefit is of course that these quarterly dividends come from a diversified pool of investments. The underlyings are more value-style and UK which in the current market environment have been holding up rather well.

Rollinghome

With average luck, you're likely to get a return of perhaps 5% p.a. on a FTSE100 stock like Shell or BP.  So maybe 25p on a fiver.  Doesn't seem the sort of bet to get the pulse racing.

An oil exploration company like Rockhopper (RKH), or whatever the latest meme stock on Reddit is, might be more exciting.  And it's down from a price around 500p a few years back to 14p now, so you'd get a lot for your fiver. That definitely isn't a recommendation. There are always plenty of exciting ways around to lose money.