Crude oil prices have risen over $100 a barrel since Russia’s invasion of Ukraine, and the average gas price in the U.S. has shot above $4 a gallon. If you’re curious about investing in oil, oil ETFs are an easy way to do so.
Oil ETFs, or exchange-traded funds, are baskets of securities that either track the price of oil as a commodity or contain oil stocks. Oil ETFs give investors easy access to a commodity that’s difficult to own and store. But oil prices can swing drastically in either direction and can be closely correlated to global and geopolitical events, making it a complex and often risky investment.
The best-performing oil ETF based on one-year performance is the United States Brent Oil Fund LP. Keep in mind, the best-performing investment today may not be the best one next year — or even next week.
The following oil ETFs are commodities ETFs, meaning they track the price of oil through benchmarks such as the Brent Crude Oil or West Texas Intermediate benchmarks. These ETFs do not hold oil company stocks. This list also includes oil ETNs (more on that below).
United States Brent Oil Fund LP
iPath Pure Beta Crude Oil ETN
United States Oil Fund LP
ProShares K-1 Free Crude Oil Strategy ETF
United States 12 Month Oil Fund LP
Invesco DB Oil Fund
Data current as of March 14, 2022. Data is solely for informational purposes and not for trading purposes or advice. This list excludes hedged, leveraged and inverse ETFs.
Oil ETNs, or exchange-traded notes, are similar to oil ETFs in that they are both traded on securities exchanges and can be bought and sold throughout the trading day, similar to stocks. A major difference between ETFs and ETNs is that ETFs are investment companies registered by the U.S. Securities and Exchange Commission, and ETFs actually own the underlying assets that you, as an investor, own a part of. ETNs do not own an underlying portfolio of assets, and instead are made up of unsecured debt obligations. ETNs are generally considered riskier investments than ETFs.
Disclosure: The author held no positions in the aforementioned investments at the original time of publication.