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With Shenton Energy Asia, you now have the opportunity to invest in crude oil, one of the world’s most sought-after commodities. So what exactly is crude oil?
What Is Crude Oil?
Crude oil, more commonly known as petroleum, is refined into hundreds of products such as gasoline, diesel, jet fuel, natural gas, heating oil, kerosene, asphalt, lubricants and liquid petroleum gases such as butane and propane. The byproducts of crude oil are also used to produce many different types of plastics, waxes, chemicals and pharmaceutical products.
Globally, an average of more than 87 million barrels of crude oil and natural gas liquids are traded everyday. And this demand will continue to rise as we see many countries like China and India that are developing at rapid speed, in terms of population and economic growth.
As consumers, we are very dependent on crude oil that has been refined into petrol and diesel because they power our cars and buses that we use to commute from place to place everyday. And with increasing demand of crude oil faster than supply can cope, it is no wonder that many countries are also looking at alternative sources of energy, such as bio-fuel.
How Is Crude Oil Traded?
Crude oil is traded from one party to another, and can take place anywhere along the petroleum value chain.
Just like in the case of your crude oil investment with our principal, this is how the trade flow goes:
- Asian customers buy into the existing oil reserve of Canadian Oil & Gas company
- Canadian Oil & Gas company undertakes to sell customers’ oil to her existing end-customers like BP, Shell, Nexen, etc.
- When BP, Shell, Nexen, etc pays 90 days after the sale of oil, the Canadian Oil & Gas company in return pays Asian customers 3% of the purchased amount
- This buy & sell cycle repeats for 12 cycles
Buy & Sell Process:
The Art of Trading Crude Oil
Trading in crude oil doesn’t need you to gamble a lot. The oil industry has a remarkable history. What you need is to learn its ropes and waves. Then study the factors and improve your basis when investing in crude oil.
Well, in short you need to master a lot of things. But the end point is that, you should have a very good mentality and personality that could conquer your fear and bad feelings towards your investment.
You should know what you are doing and you must be certain about it. That means that you should have the confidence that you will have lots of profits. And this confidence will make you do everything.
Thus, you must not stop researching and learning more new things regarding crude oil investment. Keep on reading some facts and understand them carefully. Don’t rely in your emotions! They are traitor! So, concentrate on the facts before you make your judgment.
Never Simply Follow the Crowd
Another important thing is that be very careful in joining the crowd. Do not be at ease that you invested well because you have the same thoughts with the other investors. Make your own judgment. That is why there is a need for you to study and learn by yourself. Do you ever wonder why only few people get the highest profit?
That is because they have their own style of investing. They don’t simple follow the crowd.
Moreover, if you can see your investment dropping, don’t panic. Tough times are the good times. Most of the investors are scared and they often panic looking at their money dropping. Well, never trust your emotions. Go back to the facts. What about the history of crude oil prices for 20 or 50 years? Prices will always go down and up. It’s a cycle that never ends. That’s the reality.
Manage Your Money
Being a good investor means being a good manager of your money. You plant your money and it will grow. You need to plant it in the field, let the sun shines to it, let the rain shower it, and let it grow. So, take care it very well. Do not be too excited that your plant will give you thousands of fruits for just a second. Give it some time, space, and freedom. Do not rely your daily survival into it. Remember that that is only your investment. And investment takes time. And it needs more planning and more execution.
Photo: theabundancesociety.com
In investing for crude oil one needs planning and preparation. Prepare yourself, your time, your mind, your money, and your skills. So, expect the worse; prepare for the best.
To learn more about how our company could help you in diversifying your investment portfolio, visitShenton Energy Asia.
5 Important Steps in Investing for Crude Oil
If you are wondering how to start in investing for Crude Oil, then you are in the right track. Going back to the basics is the right thing to do. This is a very practical strategy especially if you are just a newbie. Well, the most difficult part is taking the first step. After that, things will just come out and follow in its natural way.
Just stay focused and you will be get on track in no time.
Below are some quick steps for you to get started in investing for crude oil.
1. Do your research
Educating yourself into the subject of Crude Oil is a normal thing for you to do. Learning its history will let you trace its performance in the market. In this way you will know if you are confident enough in choosing this kind of investment. But history is just one among the things that you should be researching. The company where you are going to invest your money should be carefully investigated too. Read or know some of their feedback as well as their length of years of their service presence in the market. Think over and over again if you can really trust them.
2. Study terms and vocabularies regarding Crude Oil Investment
Whether you like it or not, you should understand the meaning of some terms, symbols, and acronyms being used in trading or investing for crude oil. You will become an alien to your own investment craft if you don’t have any idea about those terms. These could be ETF (Exchange Traded Fund), USO,CLQX (Light Sweet Crude Oil), BZQX (Brent Crude Oil Futures) etc.
3. Decide how much money you want to invest
This is a little bit hard on your part as a first timer. But, to be safe, try investing in an amount in which you are most confident. If you want a small amount, then that’s fine. Actually, you better start small so that you will be more comfortable because you are not yet an expert. But what is the most important thing is that just consider the most comfortable amount of money that you are willing to risk.
4. Consider consulting to a broker or to an expert if you still have some doubts
Considering a broker or an expert is not a bad idea at all and not the best also. However, if you are a true investor by heart, you should know how to use brokers for the mean time. Listen to them and ask them a lot of questions. Cross examine them by asking questions related to your investment. After that, you will have a better idea on what’s going on. Then see the results and wait until you can do it by yourself only.
5. Make Your First Purchase or Contract
Well, this is the most exciting thing for you to do. You can do this online or offline. But nowadays, may people love trading or purchasing online because it is more accessible. You can do it by yourself or through a brokerage. So, choose the best kind of purchase either a future contract or in ETF’s.
There are still many steps in investing for crude oil. However, these steps are the most simple and very practical. Anyway, it will not be that hard on your part especially if you really know your very reason why you have the interest in investing for crude oil.
5 Important Steps in Investing for Crude Oil
If you are wondering how to start in investing for Crude Oil, then you are in the right track. Going back to the basics is the right thing to do. This is a very practical strategy especially if you are just a newbie. Well, the most difficult part is taking the first step. After that, things will just come out and follow in its natural way.
Just stay focused and you will be get on track in no time.
Below are some quick steps for you to get started in investing for crude oil.
1. Do your research
Educating yourself into the subject of Crude Oil is a normal thing for you to do. Learning its history will let you trace its performance in the market. In this way you will know if you are confident enough in choosing this kind of investment. But history is just one among the things that you should be researching. The company where you are going to invest your money should be carefully investigated too. Read or know some of their feedback as well as their length of years of their service presence in the market. Think over and over again if you can really trust them.
2. Study terms and vocabularies regarding Crude Oil Investment
Whether you like it or not, you should understand the meaning of some terms, symbols, and acronyms being used in trading or investing for crude oil. You will become an alien to your own investment craft if you don’t have any idea about those terms. These could be ETF (Exchange Traded Fund), USO,CLQX (Light Sweet Crude Oil), BZQX (Brent Crude Oil Futures) etc.
3. Decide how much money you want to invest
This is a little bit hard on your part as a first timer. But, to be safe, try investing in an amount in which you are most confident. If you want a small amount, then that’s fine. Actually, you better start small so that you will be more comfortable because you are not yet an expert. But what is the most important thing is that just consider the most comfortable amount of money that you are willing to risk.
4. Consider consulting to a broker or to an expert if you still have some doubts
Considering a broker or an expert is not a bad idea at all and not the best also. However, if you are a true investor by heart, you should know how to use brokers for the mean time. Listen to them and ask them a lot of questions. Cross examine them by asking questions related to your investment. After that, you will have a better idea on what’s going on. Then see the results and wait until you can do it by yourself only.
5. Make Your First Purchase or Contract
Well, this is the most exciting thing for you to do. You can do this online or offline. But nowadays, may people love trading or purchasing online because it is more accessible. You can do it by yourself or through a brokerage. So, choose the best kind of purchase either a future contract or in ETF’s.
There are still many steps in investing for crude oil. However, these steps are the most simple and very practical. Anyway, it will not be that hard on your part especially if you really know your very reason why you have the interest in investing for crude oil.
5 Effective Ways to Invest in Crude Oil
Once you have decided to invest in crude oil, you have already taken the first positive step. There are a lot of ways in investing in crude oil. Be prepared as the process will most definitely challenge your creativity and critical thinking skills.
It’s fun in short! It is challenging yet worthy of your time, effort, and money.
Photo: rigzone.com
Learn the 5 most effective ways:
1. Investing in Oil Futures
One of the highlights for investing in crude oil is through its oil futures. However, you need to know better how oil future investment works. From its name “future”, you get the hint that it means you will pay for the oil at a certain price and it will be delivered at a future date.
Hence, a contract. Because of its nature, there are risks if you are really willing to take them. You can invest on futures online or offline. Choose a broker and submit the necessary documents for processing. After that, make your first deposit of their minimum price. It is pretty simple!
2. Investing in ETFs and ETNs
ETF means Exchange Traded Fund while ETN means Exchange Traded Notes. ETC is a security that allows you to trade or invest in crude oil just like you are trading in the stock market. Prices will rise and fall in a day because the buying and selling are ongoing.
ETN is actually quite similar to ETF. Their differences lie in the structure of their operation. One example is how you will be taxed. You will need to perform some research to decide which one is best for you.
3. Investing in Major Oil Companies
This could be one of the better choices that you can make. Major oil companies are stable and have the authority as well as the dominance in the market. Investor have more confidence investing in major oil companies because they are the big players in the crude oil industry.
Some examples of these are Royal Dutch Shell, Exxon Mobil, Chevron, amongst many others. However, you will still need to do a little bit of research here and there to figure out which one works for you. Consider buying their stocks.
4. Investing in Big Drilling Companies
Drilling companies can also do great wonders to you investment. One big advantage for you is that these big drilling companies are directly connected to locations where there are plenty of oil.
That means your investments may be more secure because these companies have a better edge compared to other companies. Thus, it is always a wiser choice to invest some of your money in these big drilling companies.
You will still need to check on their location, activities, performance, current company stability and other factors that contribute to profitability. So, how do you invest in these companies? Again, you have the option of buying their stocks online or offline.
5. Investing in Big Oil Equipment Companies
Investing in big oil equipment companies is a very creative option for you as an investor. Equipment can give you good profits too. Just choose well which kind of equipment that you should be concentrating in. Choose the equipment which are in high demand, expensive, has long term marketability, and have high quality standards.
Most importantly, choose a trusted company that has a stable name in the oil equipment industry. You can buy some shares through their stocks. Again, it really pays to read and research to ensure better success rates.
There are a lot of ways in investing in crude oil.
Resourcefulness and Creativity
What you need is a little creativity, wit, resourcefulness, intelligence, patience, and common sense.
Learn more about how our company could assist you in crude oil investment, click here.
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