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Oil has not been the talk of markets since the pre-recessionary time when sky high prices, above $140 per barrel to be exact, were acting as an anchor on various aspects of our economy. That period in time saw numerous businesses struggle with soaring crude prices, a good example being U.S. airline Skybus, which was forced to go out of business due to profits being severely pinched by jumps in crude. Then tragedy struck as markets took a nose dive, bringing oil prices back down to earth, where they remained, until recently.

Since early 2011, when revolutions and crises broke out in various countries all across the Middle East, oil has enjoyed strong gains. Investors watched crude jump above the important $100 per barrel mark, and continue to nearly $120. While oil spikes have negative ramifications for consumers and businesses alike, investors are scrambling to find the right picks to benefit from crude’s meteoric rise, that is until a few days ago. Oil saw a flash crash of sorts to start May when it lost over 9% in one trading session due to an unexpected hike in jobless claims and concerns over demand for the crucial commodity. The recent drop in crude prices could make the commodity an intriguing investment for those with a long time horizon. Most agree that oil prices have pretty much one way to go over the long term, and with the dollar continually struggling, prices well over $120 are well within reason (also see The Definitive Oil ETF Guide).

While there are various ways to gain exposure to crude oil in the derivatives market, many of which, unfortunately, are not meant for the average trader, as we have seen in the early part of May. Luckily, investors have the option to utilize the power of exchange traded funds and their significant exposure to this important market segment. ETFs have stepped in to democratize this sector of the financial world, and offer all kinds of exposure to crude oil. There are popular futures based funds, such as the United States Oil Fund (NYSEARCA:USO), which allows investors to trade futures contracts without opening a relatively complex and expensive futures account. There are also major equity-based products, like the Energy Select Sector SPDR (XLE) and HOLDRS Merrill Lynch Market Oil Service (OIH), which offer exposure to various firms that do the majority of their business in the crude oil sector.

But once you pass these two ETP segments, most investors stop digging deeper. They have already found the biggest and most popular ways to play the fossil fuel. While these big name ETFs are strong options, investors may find that looking behind the scenes at some lesser-known ETFs could offer more unique strategies to add to their portfolio while at the same time possibly providing outsized gains as well. Below, we outline three relatively unknown ways to gain greater exposure to crude oil prices that may be a solid choice for some investors:

United States Brent Oil Fund (NYSEARCA:BNO)

Brent oil, while still considered light sweet crude, is not quite as light as WTI, and is also considered a lower grade. Because of this, WTI often trades at a premium to Brent, though this gap has slowly evaporated as oil has been very volatile as of late. Brent is most often extracted and consumed in Northern Europe, and it gives traders a different way to play crude. Many investors believe that Brent actually offers a better global benchmark for oil, as it is rapidly gaining ground on WTI on the world stage. Brent is also the most obvious alternative to WTI as it is already used as the primary benchmark in major oil producing regions in the Middle East and North Africa including those in Saudi Arabia and West Africa.

This futures-based commodity fund strays from the norm by investing in the less popular - at least from an ETP perspective - Brent crude oil, where as most funds offer exposure to WTI crude. BNO changes hands an average of 51,000 times a day, and has gained close to 25% this year (this compared to the meager gains of 5.3% for USO). This fund may be a good option for investors who are looking to the future, as Brent is seen as a more accurate global benchmark when compared to WTI.

Guggenheim Canadian Energy Income ETF (NYSEARCA:ENY)

Canada is an economy known for its natural resource strength, namely oil. This nation ranks as the sixth highest oil producing country in the world, putting out nearly 3 million barrels a day, and making up just under 4% of the world’s total market share. Many investors make a play on this country simply to gain exposure to its strong energy exports, but this fund will allow investors to directly gain exposure to major Canadian oil firms.

This ETF tracks the unique Sustainable Canadian Energy Income Index, which uses a rather interesting methodology to choose the most profitable and liquid Canadian royalty trusts that are focused on oil sands. Oil sands are unconventional petroleum deposits that exist in tar found in sands and rock formations. Though the refining process is tedious, this production can be profitable when oil is trading at a high price, like in today’s economy. ENY will give investors a way to access oil sands, spicing up a plain-vanilla crude holding. The fund has gained nearly 10% on the year while paying out a nice dividend of 2.8%.

Global X FTSE Norway 30 ETF (NYSEARCA:NORW)

When most people think of the world’s top oil producers, nations like Russia, Saudi Arabia and the U.S. come to mind. Not many people give Norway a passing glance. However, Norway is among the largest producers in the world of crude, 14th to be exact. The Norwegians are responsible for roughly 1.8 million barrels daily, or 2.5% of the world’s total share. While 2.5% may seem minute, consider that the world’s top producer only grabs 12.8%, meaning that Norway is certainly a significant, but often overlooked, player in the crude market.

This ETF measures the broad based equity market in Norway, and it is dominated by energy. NORW allocates just under 40% of its total assets to the energy sector, giving investors plenty of exposure to the robust Norwegian crude market. NORW was introduced late last year and is steadily picking up steam with over 105,000 shares trading hands every day. Thus far in 2011, this ETF has gained 5.8%.

Honorable Mentions (NYSEARCA:IOIL) (NYSE:XOIL)

There are two new ETFs that will also offer new spins on the crude sector. First, there is the Global X Oil Equities ETF (XOIL), which seeks to measure the performance of global oil companies that are highly correlated to the spot price of oil. This fund offers one of a kind exposure to equities that are specifically tied to the crude commodity itself. Second, there is the brand new IQ Global Oil Small-Cap ETF (IOIL), which offers exposure to small-cap companies involved in the crude oil sector. Both of these funds give investors unique exposure to oil, but are too young for many advisors or investors to feel completely comfortable with, as they have both launched within the last few months. However, for investors seeking a different slice of exposure in the oil markets, either of these products may be worth a closer look as well.

Disclosure: No positions at time of writing.

Disclaimer: ETF Database is not an investment advisor, and any content published by ETF Database does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. From time to time, issuers of exchange-traded products mentioned herein may place paid advertisements with ETF Database. All content on ETF Database is produced independently of any advertising relationships.

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Source: 3 Forgotten ETFs That Play the Oil Sector