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How do you invest in West Texas Intermediate?

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Quick Answer

You can invest in West Texas Intermediate in one of three ways, an exchange traded fund, futures contract or individual stock, according to Commodity HQ. WTI is a sweet crude oil that often trades at a premium to lower grades of crude.

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Full Answer

The most popular ETF for investing in WTI is the United States Oil Fund. The sensitivity to oil prices depends on the type of futures contracts the ETF holds. Other options include the United States 12-Month Oil Fund, Teucrium’s Crude Oil Fund and the PowerShares Oil ETF. Commodity HQ notes that there are also several ETFs available that own companies, such as Chevron and Exxon, engaged in oil production. These include the Energy SPDR and iShares S&P Global Energy Sector Fund, which invest in international as well as domestic producers.

A WTI futures contract, listed as CL on the New York Mercantile Exchange and the most widely traded energy product in the world, represents 1,000 barrels of oil. Investopedia warns that futures trading is risky and an investor should be financially strong enough to accept any losses that might incur.

Investing in the stock of oil-producing companies offers indirect exposure to the price of WTI, notes Commodity HQ. Scanning the holdings of the Energy SPDR ETF can give an investor ideas for individual stocks in invest in.

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