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How can I invest in oil?

A reader asks what products he can use to capitalise on potential oil price gains
January 7, 2015

An IC reader asks: "The price of oil has nearly halved and, while it's possible it could halve again, I believe the price will recover on a timeframe of anything between six months and five years. How might I capture those gains?"

Oil prices have plummeted over the past year to dramatic lows. This week the US oil price fell below $50 a barrel for the first time in five years and ICE February Brent - the international oil marker - fell a further $1.42 to $51.64 on Tuesday 6 January 2015 in early trading. The price of Brent Crude and West Texas Intermediate Crude (WTI) have now more than halved since mid 2014.

That could spell opportunity if the market lifts over the coming years and there are several options for those willing to take a risk on the price of crude oil. Our reader is keen to invest in a product that will directly reflect the share price of the commodity and is not enthusiastic about investing directly in oil giants such as Shell or BP, which would give him an income but not necessarily reflect the price of oil.

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