There might be a few ways to play the oil market without actually trading oil.
A few years ago one of the regulars here on babypips followed oil and had some experience trading it. To filter out some of the volatility and risk this trader continued to follow the oil markets but started trading the CAD pairs as he/she would have traded oil.
He/she found the CAD pairs and oil had a pretty strong correlation. Every Wednesday when the US oil inventory reports came out he/she would watch and trade the USD/CAD, EUR/CAD and JPY/CAD pairs.
I guess another advantage to trading CAD instead of oil is the amount of capital, you can be up and online trading CAD with a lot less than you would need to trade oil contracts.
When I started trading stocks in 2005 I followed the crude markets and traded the oil service stocks. It worked pretty well, when crude was going up so did the oil services, but without the crazy swings and volatility.
I would also trade a few of the smaller refineries, trying to play something called the crack spread. Sometime the crude inventories were high, and gas inventories were low, allowing the refiners to produce higher priced gas with lower priced crude. I’d short the refineries if the spread went the other way. I won’t get into the fun and games during hurricane season, that’s another story. LOL!
Oil related ETF’s could be another way. The point is, there can be a lot of ways to play the oil market without the risk of trading oil!