Oil and gas prices rise when the economy is doing well since more energy is needed to produce goods and services. It also goes up in price when there is a supply disruption: wars, terrorist attacks, a significant spill in a prominent well. Oil falls in price when the economy downturns due to a narrower need to produce the goods and services we consume. It also drops in price when production (supply) increases or stocks increase. With the coronavirus pandemic, we've seen several of these effects, altogether. These are just a few examples that show that volatility in the price of oil can be massive, and price levels depend on many factors. This is why investing in oil through CFDs can become a lucrative activity.  Below, we explain the process to invest in oil & gas through CFDs from Japan, for investors with little capital [Little capital = less than 100-200 US Dollars]. We added above a list of trading platforms if you wish to start trading oil-related financial assets straight away.

Oil CFDs: Volatility at its best

Crude is an unrefined oil. It is extracted from hydrocarbon deposits and other organic materials and refined to produce usable products, such as gasoline, diesel, petrochemicals (such as plastic), fertilisers, and even medicine. Due to this raw material's versatility, it is the basis, heart, soul and blood of the world economy: For the better and for the worse, the world would not be the same if oil wasn't available. This is why the oil price's impact on the global economy is massive. It is a two-way correlated relationship, and economic data is directly related to oil price and vice versa.

If a regular investor in Japan wants to invest in Oil or Gas, they can't just go to a rig asking to share the profits. The easiest way to start trading in the oil markets is via CFDs [We will note a brief explanation about what that means later]. The two most common methods of investing with CFDs are Brent Oil and WTI (West Texas Intermediate), the two central price measurement systems: crude oil barrels available on the main energy markets. A trader can also operate on this raw material through Gasoline's prices or the commodity known as Heating Oil, which is oil but refined, and ready to be used.

As the reader of this article probably knows, CFD stands for Contracts for Difference. This financial instrument allows you to trade changes in the price of futures and options, but with the simplicity of not needing to manage complicated oil contracts. A CFD on oil then replicates the price of oil, without the need to trade in physical oil, in other words, to travel to Texas or Saudi Arabia and buy barrels of oil. It is then obviously an efficient way to invest in oil if you understand that trading on the rise and fall of the price of this raw material might be a good option for your investment portfolio.

What's the minimum amount to Invest in Oil-related financial instruments from Japan?

Many Brokers do not have a minimum deposit (or a meagre amount of money). Many others do not charge a commission for the purchase and sale of Commodity CFDs. So, you do not need to be an investment banker to start trading oil related assets.