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    So many big companies and people make billions from oil.
    Do they buy it as a commodity ( investment) or do they buy oil from buying a land in countries such as Saudi Arabia?
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    Companies buy drilling rights and extraction rights then just pump it out the ground.

    Traders buy it and sell it later for a profit.

    Investors put up the money for the traders and then take a share of the profits.
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    Everybody wins!



    Oh wait......
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    If one was to be an investor, where could we buy the share from? Would you buy it as a commodity or from a company?
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    You could buy shares in BP/Shell/Tullow Oil etc which are basically, but not truly, linked to oil price. Or you could buy leveraged funds, whereby for every 1% rise in oil price you get a 10% return (say). This also works backwards though, and big losses are easy to accumulate if the market moves against you. Or you could spread bet - basically you bet which way the price will go, easy to win big, easier to lose big.

    For a beginner the best thing to do would be watch the markets and begin to understand them. If you wanted to cash in- as it were- then maybe buy shares in a big company such as those Ive listed.

    Here is the price for BP as listed on the LSE.
    http://finance.yahoo.com/echarts?s=B...urce=undefined

    As you can see, within one month it moves by about 35p. If you buy shares then no matter what happens - as long as the company doesnt go bust- then you still hold the shares.
 
 
 
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