How to Buy Oil Stocks 2023

In response to the intensification of the conflict in Ukraine in 2022, and on account of difficulties in the supply chain, oil and commodities are once again gaining ground with the general public. Therefore, as the market has been trending upwards, it has become one of the most successful assets.

Given this scenario, it is not unreasonable for you to consider investing in oil stocks in your portfolio, as this would be a prudent move. So, to help you in this matter, we have prepared this how to buy oil stocks guide in which we will learn you how to buy oil stocks without commissions and from the comfort of your own home.

How to Buy Oil Stocks – Quick Guide

• Step 1 – Getting Started with eToro:  Click the ‘Join Now’ button on the top right of the website and fill out the registration form to open an account with eToro.
• Step 2 – Upload your ID to your newly created eToro account: Once your ID has been uploaded, it will be verified immediately. Choose from a passport, state ID, or driver’s license.
• Step 3 – Deposit Funds: The broker’s supported deposit methods, including e-wallets, credit/debit cards, and ACH, are free for US clients. For example, depositing with eToro from the US requires only a $10 minimum deposit.
• Step 4 – Search for Oil Stocks: You can type the company name into the search bar if you know which oil stock you want to buy. Once you’ve selected the stock, click ‘Trade’.
• Step 5 – Buy Oil Stocks:  You must type your total stake starting with $10 in the ‘Amount’ field. Once you have made your choice, click ‘Open Trade’ to proceed with buying the oil stock.

Popular Brokers To Buy Oil Stocks

1. eToro – Overall Best Way To Buy Oil Stocks In 2023

When it comes to buying the best oil stocks in 2022, our choice is eToro, since it is the largest online broker. Using this popular social trading platform, you will have direct access to thousands of stocks to trade. This platform is used by more than 25 million people in the USA alone.

In addition to the US market, this also covers markets in more than a dozen countries, so it is a huge range of oil stocks. Moreover, with eToro, you can buy and sell oil stocks with no commission. As an additional benefit, if you open an eToro account, you will have access to various financial markets.

eToro’s most attractive feature is that you can invest in stocks from as low as $10 with a minimum investment. As a result, you have the chance to trade fractional shares to gain exposure even to some expensive stocks on the market. 

Besides this, you need to keep in mind that dividends owed by oil stocks will be deposited directly into your eToro account when you invest in these stocks. The dividends you receive from oil companies can then be reinvested back into the oil industry or requested to be withdrawn. In addition, there are hundreds of commission-free ETFs available for sale on eToro to diversify your portfolio even more.

Alternatively, you can consider to buy oil ETF (exchange-traded fund) as another alternative to buying oil stocks. Using the copy trading feature, you can also follow other investors buy and sell positions on eToro. As a result, passive investing is easier since all you have to do is choose a reputable trader who aligns with your objectives.

75.3% of retail accounts lose money when trading CFDs with this provider. Consider whether you can afford to take the high risk of losing your money. 

What Are Oil Stocks

Oil stocks is a term used to label companies that are in the business of oil extraction. Basically, by buying stocks in a company listed on the stock exchange, you’re putting your money into a company expecting that it will constantly rise in value as time goes by.

The oil sector allows you to gain capital gains and dividends from your investment, so when you own oil stocks, you stand to gain capital gains and dividend payments as and when they are paid.

Almost all large-scale oil producers also distribute dividends to their shareholders. This means that you will receive a regular payment every quarter or even bi-annually. As a result, investors are advised to choose their oil-fuel dividend stocks carefully despite the sector’s volatility, looking specifically for firms with strong balance sheets and strong cash flow streams that can reliably generate income.

Investing in oil shares is very similar to other stock market investments. As a general principle, your overarching goal is to buy the shares at a lower price than you eventually wish to sell them. Therefore, oil stocks should generally be purchased when oil prices are low, and the outlook suggests that they will rise rather than when prices are already high. On the other hand, oil prices affect different types of oil stocks. Therefore, making sure that you take a close look at the recent oil price is a critical first step in investing in oil.

When choosing the best oil stocks for you, it is imperative to look for companies built to survive the inevitable downturns in the sector. For this reason, it makes sense to emphasize those producers with relatively low production costs and integrated oil giants who are immune to price fluctuations. Furthermore, with their contractual obligations in place, midstream businesses should also be able to deal more easily with adverse market conditions than other post-production companies in the supply chain.

Oil Stock Price

There has been a surprising rise and fall in the price per barrel over the recent months, surpassing three figures since the war between Russia and Ukraine began on February 24. This is due to Russia having the largest proven reserves of natural gas and being one of the three major producers and exporters of oil globally.

75.3% of retail accounts lose money when trading CFDs with this provider. Consider whether you can afford to take the high risk of losing your money. 

According to the latest prices published by Oil Price Charts online, the price of one barrel of Brent crude oil closed at $119.72, which is a rise of 1.79%. In contrast, a barrel of WTI crude oil rose 1.71%, trading at $118.87 per barrel.

With this bullish sentiment, it is estimated that a spike in black gold prices is due to expectations that the Organization of Petroleum Exporting Countries (OPEC) will increase production globally, which would lead to a rise in global supplies.

Global oil producers will have to increase their investments significantly to cover Russia’s oil supply. This will enable them to replenish the reserves of the International Energy Agency by 2023, said analysts at JPMorgan.

Oil Stock Price Prediction

Several analysts believe that the price of oil in 2022 will be determined by what happens to the conflict between Russia and Ukraine. There will also be another important factor to observe: Iran’s current nuclear talks. Consequently,  they have maintained a cautious position when predicting the next movements of the commodity, despite their confidence that the sentiment on the market will remain bullish. 

According to UBS, two scenarios regarding Brent crude oil price have been forecasted based on the firm’s estimates. The main one is the bullish outlook forecast seeing Brent becoming a price between $115 and $130 per barrel by December 2022. However, they also predicted a drop to between $60 and $85 per barrel for the same time in their bearish outlook due to a slowdown in China’s economic growth in 2022.

“Destabilizing political developments in oil-producing regions such as Libya, Venezuela, Nigeria, and the Middle East could trigger a sharp drop in supply over a sustained period. A faster-than-expected recovery in oil demand as mobility recovers, and a slow production response from the U.S. and OPEC+ would also be supportive,” said UBS.

Meanwhile, ANZ Research forecasts Brent crude oil to trade at $86.80 on average. From a long-term perspective, they believe it will trade at an average price of $86.20 per barrel over 2023. However, they predict that WTI prices will rise to $85.10 per barrel in 2023, compared to $83.90 per barrel for 2022.

At the same time, the independent energy research company Rystad Energy has warned that oil prices may trend lower in 2023 because of the rebalancing of supply and demand. On the other hand, according to the United States Energy Information Administration’s Energy Outlook 2021, Brent crude may have a nominal price of 66 dollars per barrel in 2025, while the price of West Texas Intermediate (WTI) crude may drop to 64 dollars per barrel. 

3 Oil Stocks To Buy

For those looking for a guide to the best oil stocks in the United States, here are three of the major companies you should keep an eye out for when choosing a stock that fits your needs and investment goals.

1. ConocoPhillips – Overall Best Oil Stock To Invest In

With its headquarters in the United States and a stock listed on the NYSE, ConocoPhillips is one of the country’s biggest oil companies. There are more than a dozen countries in which the company operates. Its specialty is finding and producing oil and natural gas.

Considering it is uncertain what the future oil demand will be, ConocoPhillips is planning to return a considerable percentage of its free cash flow to investors over the coming years. As a result, dividends will be paid continuingly, shares will be repurchased, and a variable cash return will be paid.

In 2021, the company posted $6.07 per share, a marked improvement from the previous year’s loss of $2.51 per share. In addition, dividends and share repurchases returned $6 billion to shareholders through dividends. Current dividends that the company pays the common shareholders will total 46 cents per share, resulting in annual dividends of $1.84 and a yield of 2%. The company has already informed the shareholders that it plans to return $2 billion to shareholders by 2022.

Besides having a low-cost portfolio, the company also has an excellent financial profile. As a company, ConocoPhillips consistently earns an excellent credit rating, with low leverage ratios for the sector and a large cash reserve to back it up. 

75.3% of retail accounts lose money when trading CFDs with this provider. Consider whether you can afford to take the high risk of losing your money. 

2. Exxon Mobil – Outstanding Oil Stock for Getting Dividends

This US-based company was created through the merger of Exxon and Mobil in 1999 and is recognized as a major producer of crude oil and gas. In the oil industry, ExxonMobil is one of the biggest names with a market cap of over $350 billion and is listed on the New York Stock Exchange. 

ExxonMobil has focused its efforts more on improving its efficiency and reducing its costs in recent years. As a result, in the last few years, the company has been able to reduce its oil production costs significantly through resource allocation, focusing on its highest-return assets, and better leveraging its massive scale, which began to pay off in 2022 as well. Thus, whenever oil prices are high, the company can generate a lot of cash flow.

Based on analyst predictions, the company is expected to report earnings of $8.61 per share per year in the coming year, which creates a forward P/E of 11. 

Investors’ fascination with energy assets and high oil prices remain the primary driving forces for Exxon Mobil stock. Even though Exxon Mobil is already up by about 60% in 2022, it is expected to have a rapid increase in future value if WTI oil settles at least $120 and moves towards yearly highs near $130 levels.

As long as this cash flow continues, ExxonMobil should be in a position to maintain its dividends. In addition, many investors are choosing to avoid oil stocks altogether because of the growth of renewable energy sources. Although ExxonMobil invests in cleaner fuel sources, such as carbon capture and storage, it also invests in renewable fuels. As a result, it should continue to supply the economy with fuel for a longer period.

75.3% of retail accounts lose money when trading CFDs with this provider. Consider whether you can afford to take the high risk of losing your money. 

3. Phillips 66 – Exceptional & Stable Oil Refinery Stock To Buy In The US

The Phillips 66 company is manufacturing, logistics, and refining conglomerate and a world leader in diversified energy.

Phillips 66 enjoys one of the lowest costs in the refining industry due to its large-scale, vertically integrated operations. By leveraging its integrated midstream network to obtain low-cost crude for use in refineries and petrochemicals and investing in projects that provide higher margins for its products, the company has improved its profitability.

When it comes to performance, the stock of Phillips 66 has performed a bit differently than the rest of its peers. This is because it has seen a rise of just 5% after one year and 11% after five years.

Moreover, Phillips 66 has a very strong financial profile that includes a top-notch balance sheet and a short-term debt that is easily manageable. In addition, the company also has a large cash reserve. Because the debt is low and the cash reserves are high, it can invest in expensive expansion projects, such as renewable energy.

Phillips 66’s focus on making smart investments and returning cash to shareholders will allow it to continue to add shareholder value in the coming years due to its focus on investment management.

75.3% of retail accounts lose money when trading CFDs with this provider. Consider whether you can afford to take the high risk of losing your money. 

Buy Oil Stocks Stocks with eToro

Stocks are now easier to buy than ever before. Then, where to buy oil stocks? Investing in these assets easily and friendly through eToro is an excellent choice for anyone interested in doing so.

With this in mind, we will teach you to step by step so you can learn how to buy stocks and begin your investment from opening an account in a couple of minutes, verifying your identity, depositing funds, then picking a company, and finally buying oil stocks.

Step 1: Open an Account

Opening an eToro account is really quick and easy – including the phase of confirming your ID. Then, by clicking on the ‘Join Now’ button located on the eToro website, you will be prompted to fill out the registration form below.

Your broker will require your name, address, and social security number. All regulated online stock brokers must comply with this requirement.

75.3% of retail accounts lose money when trading CFDs with this provider. Consider whether you can afford to take the high risk of losing your money. 

Step 2: Upload ID and Confirm Identity

Your ID will be needed at this point in the registration process. The form may be completed on your driver’s license, passport, or state ID card. However, the document copy should be clear, and the identification should still be valid, so make sure that this is the case.

Besides the copy of the document you submitted in the previous step that confirms the home address you stated, you will also need to submit a copy of another document. For example, if you are unsure what to submit, you could opt to submit a recent bank statement. However, most other forms of documentation can also be submitted.

Almost always, verification of your documents takes less than a minute.

Step 3: Deposit Funds

It is now time to add some funds to your eToro account so that you can trade. Furthermore, eToro is the best broker for buying oil stocks, largely due to the fact that you have a wide range of payment methods available.

Your account can be funded instantly with Visa, MasterCard, Paypal, and several other electronic wallets. In addition, you will not be charged a deposit fee if you are from the United States.

The minimum deposit on the eToro website is only $10 for all supported payment methods.

Step 4: Search for Oil Stocks

eToro’s search box is located at the top of the dashboard if you are ready to invest in oil stocks right now. For example, in the following screenshot, you can see that we are looking for Exxon Mobil.

Click on ‘Discover’ if you want to make another choice. After you have completed this step, you will be able to browse the many oil stocks that you can find on eToro.

Step 5: Place a Trade

You can now create an order box by selecting the Trade button next to the oil stock you wish to purchase. By doing so, you should be able to see a box to place your order, as shown below.

Now, you simply have to enter the stake you wish to use and click on the ‘Open Trade’ button to confirm the order. 

75.3% of retail accounts lose money when trading CFDs with this provider. Consider whether you can afford to take the high risk of losing your money. 

How To Buy Oil Stocks – Conclusion

While the commodities market is booming and prices are rising, it is certainly beneficial to make investments in oil stocks with the potential of earning handsome dividends at the same time.

You can easily and simply buy oil stocks using the eToro online trading platform without any complications. It will take you minutes to buy or sell an oil share.

As a bonus, eToro is also an affordable option for those who are trading fractional shares. You only have to place a minimum deposit of $10 if you wish to buy the best oil stocks without worrying about trading commissions. 

eToro – Overall Best Platform to Buy Oil Stock

75.3% of retail accounts lose money when trading CFDs with this provider. Consider whether you can afford to take the high risk of losing your money. 

FAQs

How can I invest in oil with little money?

Yes, it is possible. For example, in our recommended broker, eToro, it is possible to buy the best oil stocks with a minimum investment of just $10. Due to this reason, you can actually trade fractional shares to gain exposure even to the most expensive stocks in the market today.

What is an oil ETF?

An oil ETF is a kind of exchange-traded fund that offers investors a way to increase their return from an increase in oil prices due to volatility. There are different ways in which oil ETFs can achieve this. For example, companies may be involved in the oil and gas industry, while others may invest directly in the commodity itself.

Do Oil ETFs pay dividends?

In oil exchange-traded funds (ETFs), investors can purchase shares of various stocks and receive the dividends paid by those stocks. These dividends are credited to the investor's account. Most ETFs pay the dividends quarterly to the extent that they are pro-rated. In other words, investors will receive payments according to their shareholdings. It is usually paid as dividend payments either in cash or in additional ETF shares.