Oil prices have been surging recently, driven by factors such as supply limitations and geopolitical uncertainties, including ongoing conflicts in Ukraine and the Middle East.

Brent crude oil, the international benchmark, has risen 11% so far in 2024. Now it stands around $90 per barrel, near six-month highs.

To investors, there are always ways to take profits even if they don’t own this energy asset.

Buying Stocks of Oil and Gas Companies

Buying shares of UK’s energy companies is a good choice if you are looking at where to start. Apart from stock price appreciation, investors have the opportunity to generate income through these companies’ dividend payments.

Below are 3 energy giants in the UK:

BP

It is one of the oil and gas “supermajors” as well as one of the world’s largest companies measured by revenues and profits. Operating in all areas of the oil and gas sector, the company has established itself as a key player in the UK’s energy industry.

Shell

Shell, ranking as the second largest investor-owned oil and gas company globally by revenue (after ExxonMobil), stands among the world’s largest corporations across various industries. Similar to BP, Shell is extensively involved in all facets of the oil and gas sector, including exploration, production, refining, transportation, distribution, and trading.

Centrica

As the leading provider of gas to domestic customers in the UK, Centrica supplies electricity and gas to consumers in the UK and Ireland. The company is listed on the London Stock Exchange and is included as a constituent of the FTSE 100 Index, which comprises the UK’s top-performing companies.

Investing in Oil ETFs

Exchange-traded funds (ETFs) are investment vehicles that pool together funds from multiple investors to create a diversified portfolio of underlying assets. If you want to minimize company-specific risks, you can consider ETFs.

ETFs that contain oil companies include the Energy Select Sector SPDR Fund (XLE), the Vanguard Energy ETF (VDE), WisdomTree Brent Crude Oil (BRNT) and ProShares Ultra Bloomberg Crude Oil (UCO).

Trading Oil CFDs

Contracts for Difference (CFDs) are derivative financial instruments that allow investors to speculate on the price movements of various underlying assets without owning the assets themselves.

By trading oil CFDs, you can speculate on the ups and downs of oil prices without needing to physically own it. CFDs, being leveraged derivatives, offer the advantage of gaining exposure to the complete value of the underlying oil market by only committing a small portion of it, known as margin. For instance, with a leverage level of 1:10, to open a position worth $1000, you’ll only need to put down $100.