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How to buy oil stocks in Ireland

4 ways to slip this valuable commodity into your portfolio.

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4 ways to buy oil stocks in Ireland

  1. Oil ETFs
  2. Oil MLPs
  3. Oil stocks
  4. Oil futures

Oil ETFs

Worth considering are exchange-traded funds (ETFs), which provide access to a variety of assets without putting all of your money into individual firms. Rather than buying a stock, you’re buying an oil ETF, which is a basket of stocks that typically tracks the performance of multiple oil stocks.

Purchasing commodity-based oil ETFs is a direct method of owning oil. ETFs allow Irish investors to minimise risk while taking advantage of the performance and general popularity of a particular sector. And oil ETF investors can avoid the risk of exposure to single stocks that fluctuate based on oil prices. Oil ETFs can be a good choice for those who are new to investing or looking to secure their portfolio, and you have many oil-based ETFs to choose from, covering many companies in the industry.

Oil MLPs

Existing primarily in the gas and oil industry, a master limited partnership (MLP) is a tax-advantaged corporate structure. It combines the tax benefits of a partnership with the liquidity of a public company. Like a partnership, profits are taxed only when Irish investors receive distributions.

MLPs typically own the pipelines that carry the commodity from one place to another and are known for paying high dividends. This makes them a popular option for investors in Ireland who are seeking a long-term stream of income. MLPs are still volatile, though, and risks could come from a slowdown in energy demand, environmental hazards, and tax law reform. You’ll find MLPs listed in a brokerage account just like stocks and ETFs.

Oil stocks

A simple way to invest in oil in Ireland is by buying stocks of oil companies like Falcon Oil & Gas or Tullow Oil on the Euronext Dublin. Alternatively, you can invest in oil stocks on other exchanges.

As the cost of oil changes, so do the values of these companies — although there’s no guarantee, given the number of factors they depend on. Understanding the energy cycle, the industry’s landscape, and the impact of price fluctuations can help you find undervalued oil-related stocks.

Oil futures

Futures are the most direct way to purchase this commodity without literally purchasing barrels of oil, but they’re a more advanced and complex investment option that isn’t offered by the majority of brokerage accounts. You buy a futures contract through a commodities broker in Ireland to purchase oil at a future date at a specified price. Purchases must take place before the contract expires.

Futures are extremely volatile and riskier than other investment options. You must be correct on the timing and price movement to see a profit. If you’re interested in futures, you’ll first have to choose a brokerage account that supports futures trading. In Ireland, that includes platforms like Degiro and Interactive Brokers.

Compare share trading platforms to buy oil stocks in Ireland

warning iconWarning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89 % of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
1 - 6 of 6
Name Product Brokerage Fee Markets What you can trade?
eToro
IE stocks: No

US stocks: $0
Global
Stocks, ETFs, Currencies, CFDs, Indices, Commodities, Cryptocurrencies
Investing carries a risk of loss
Trade more than 1,000 stocks globally with eToro's social trading and investment platform
DEGIRO
IE stocks: €2

US stocks: $0
Global
Stocks, ETFs, Funds, Options, Futures, Bonds, Cryptocurrencies
Investing carries a risk of loss.
Degiro lets you invest in a variety of financial instruments in different markets around the world.
Until 30 June 2022, pay no transaction fees up to €100 when you make your first transfers as a new Degiro customer. T&Cs apply.
Saxo Markets
IE stocks: €12

US stocks: US$7
Global
Stocks, ETFs, Options, Futures, Bonds, Currencies, CFDs, Commodities, Cryptocurrencies
Investing carries a risk of loss
Saxo Markets provides an online platform for trading stocks, shares, CFDs, and forex around the world
Zacks Trade
IE stocks: No

US stocks: US$1
Global
Stocks, ETFs, Funds, Options, Bonds
Investing carries a risk of loss
The Zachs Trade platform offers stocks, ETFs, bonds, options, and more with access to more than 90 exchanges worldwide
Freedom Finance
IE stocks: €2

US stocks: US$2
Global
Stocks, ETFs, Options, Futures, Bonds
Investing carries a risk of loss
Capital.com
IE stocks: No

US stocks: €0
Global
Stocks, ETFs, Currencies
Investing carries a risk of loss
Access thousands of the world's leading indices, commodities, cryptocurrencies and shares on a single platform.
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Compare up to 4 providers

What are Ireland’s oil stocks?

The choice of oil stocks tends to be quite limited on the Euronext Exchange. You’ll generally be able to invest in stocks of major Irish oil and gas companies including Falcon Oil & Gas or Tullow Oil. Alternatively, you can invest in overseas exchanges for a greater choice of oil companies. These include Chevron (CHV), Royal Dutch Shell (RDS.A or RDS.B), Total (TOT) and British Petroleum (BP). The same applies to ETFs — you can explore a range of ETF options across overseas markets. Common oil and gas ETFs include the US Oil Fund (USO), iShares Oil & Gas Exploration & Production UCITS ETF and VanEck Vectors Oil Services ETF (OIH).

Why invest in oil stocks?

  • Oil companies typically pay dividends with their stocks
  • Could benefit from share price appreciation when the economy expands
  • Typically benefits from rising oil prices

The risks

While long-term investments can be highly profitable, you should understand the risks before making any in the oil and gas sector. These include:

  • Price volatility. Wide price fluctuations can occur daily due to unpredictable changes in supply and demand.
  • Dividend cuts. If a company is unable to earn enough revenue to fund payments to investors, it may cut dividends.
  • Oil spill risk. Accidents can cause a company’s share price to drop significantly. In 2010, for example, BP saw a decline of more than 55% to its stock in the wake of the Deepwater Horizon oil spill.
Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.

How do I choose the best oil stock?

Oil stocks can be highly volatile, yielding either a huge reward or a massive downside. To choose the best oil stock for yourself, conduct due diligence and find a company with operations that you truly understand. Read more about a company’s mining background, understand the firm’s growth strategy and hedge your investment with less volatile stocks if needed.

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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