Oil ETF

PH4T

I'm looking to buy an ETF that tracks the oil price.

I've found this one, ETFS Crude Oil, that tracks the DJ-AIG Crude Oil Total Return Index.

I have an AIB Online Share Dealing account but they won't trade it there as it's denominated in USD. I'd have to set up a regular Goodbody Telephone Dealing account.

Where else could I buy this that would be cheaper than Goodbody?

pocketdooz

Do yourself a favour and don't bother with Goodbodys, Davys or any of those other jokers.

Open a trade with one of the American online brokers - try E-Trade or Ameritrade. You can do it as an Irish citizen, without a US address, just takes a little while, but there's no rush, oil is not ticking up much in the very near term.

Then buy USO - trades on the AMEX

Hanley

pocketdooz wrote: »

Do yourself a favour and don't bother with Goodbodys, Davys or any of those other jokers.

Open a trade with one of the American online brokers - try E-Trade or Ameritrade. You can do it as an Irish citizen, without a US address, just takes a little while, but there's no rush, oil is not ticking up much in the very near term.

Then buy USO - trades on the AMEX

Do you reckon there'll be a further drop before it starts to move north again?

Presumably how the US auto industry recovers will have big bearing on it?

I think demand in Japan's down 20ish%?

PH4T

pocketdooz wrote: »

Then buy USO - trades on the AMEX

USO as in the exchange traded fund United States Oil Fund LP?

pocketdooz

Hanley wrote: »

Do you reckon there'll be a further drop before it starts to move north again?

Presumably how the US auto industry recovers will have big bearing on it?

I think demand in Japan's down 20ish%?

I don't know and wouldn't a hazard a guess, as that is all it would be. What I mean though is that there is no huge rush to jump into oil investing now as there are no factors that will cause a huge run up in the next week(s) so the OP can afford to spend the time opening a US-based account.

However, I am bullish on it long term (3-5 years+).


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pocketdooz

PH4T wrote: »

USO as in the exchange traded fund United States Oil Fund LP?

Yup









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Hanley

pocketdooz wrote: »

I don't know and wouldn't a hazard a guess, as that is all it would be. What I mean though is that there is no huge rush to jump into oil investing now as there are no factors that will cause a huge run up in the next week(s) so the OP can afford to spend the time opening a US-based account.

However, I am bullish on it long term (3-5 years+).


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That's fair enough.... From my limited knowledge I would guess that prices will stay surpressed, if not decline more in the next 6 months or so. Purely because I don't see there being a massive demand for it. Obviously OPEC's probably gonna slash production to force the price up, but I can't see it being all that successful.

When the recovery eventually comes, oil's probably set for a nice jump right? In the long run, does it normally out pace the market when it comes to appreciation?

It might be a good thing to open my first ever long position in the real world on!!

pocketdooz

Hanley wrote: »

That's fair enough.... From my limited knowledge I would guess that prices will stay surpressed, if not decline more in the next 6 months or so. Purely because I don't see there being a massive demand for it. Obviously OPEC's probably gonna slash production to force the price up, but I can't see it being all that successful.

When the recovery eventually comes, oil's probably set for a nice jump right? In the long run, does it normally out pace the market when it comes to appreciation?

It might be a good thing to open my first ever long position in the real world on!!

Supply side is restricted as there is only so much OPEC members can cut production without impacting their own economies. Demand is hard to predict and depends really on how Asia holds up over the next while. Even if China's growth slows by a quarter, it is still going at a clip of 6-7%, on top of India, Vietnam etc. growing.

There will also be capacity taken offline by the big guys as the price stays below $80 - $100 bbl so that will constrict supply somewhat too.

Commodity specualtion is not my thing but I feel fundamentally it's hard to see demand not outpacing supply for a while as soon as the world economy starts to grow again, which I think will be 2010+, rather than next year. I think there's still some pain to come when audited public company accounts are releases in Q1 09.

I'm bullish on USO but looking out to 2012-2014 type of horizon



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phantom_lord

PH4T wrote: »

I'm looking to buy an ETF that tracks the oil price.

I've found this one, ETFS Crude Oil, that tracks the DJ-AIG Crude Oil Total Return Index.

I have an AIB Online Share Dealing account but they won't trade it there as it's denominated in USD.

is there any of these that are in yoyos? or all they all gbp/usd? i guess the latter would probably make more sense.

pocketdooz

phantom_lord wrote: »

is there any of these that are in yoyos? or all they all gbp/usd? i guess the latter would probably make more sense.

No unfortunately they are all in USD / GBP because that is how the exchanges price the bbls.

If you had a specific time horizon you could you could create a forex hedge easily enough to protect against forex fluctuations