The oil market is in a rampage, and asset platforms are making the most of it. Multi-asset investment platform eToro announced a new long oil portfolio for retail investors who want in.
Unprecedented price movements led to high volatility in US oil. Prices went down into the negative territory in early April, the first time in history. Around a third of global fuel, demand dropped out as a result of the coronavirus pandemic.
The firm called the portfolio OilWorldWide. This will give retail investors access to trading with 20 global companies across the oil sector representing oil production stages.
Furthermore, it also includes oil-related instruments: two ETFs and oil futures contracts.
eToro’s minimum investment for the portfolio costs $2,000. About 85 percent of it covers 20 of the largest oil companies worldwide by market cap.
What remains is allocated to oil ETFs. These include the Energy Select Sector SPDR and SPDR S&P Oil and Gas Exploration and Production.
All oil futures contracts previously available in the platform will also be in the portfolio.
eToro and Oil
CEO and co-founder of eToro, Yoni Assia, acknowledged the dramatic shift in oil demand amid the COVID-19 crisis. This is still having a knock-on effect on oil-dependent industries and companies.
During the launch, he questioned whether the change was a new world order. Otherwise, it could be just temporary, amid an unprecedented crisis the world is trying to navigate.
Nonetheless, the company still responded to strong demand from its client base. They have been asking for exposure to this part of the market in a regulated way for so long.
Many of its clients are looking at oil as a buying opportunity over a possible weakness in investment. Low oil prices, on top of lowering company share prices, could be beneficial.
The news comes as the Organization of the Petroleum Exporting Countries (OPEC) claimed that oil prices could rise this year. Some leaders even insist that it could see prices surge up to $40 as some countries return from nationwide lockdowns.
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