HighFxMarkets will help you to become a successful oil trader
For many years, oil trading has been the stalwarts of the commodities market. But is it for you? We are here to help you determine whether the oil trades can be beneficial to your portfolio or not.
Although it’s called ‘Oil Trading’ colloquially, oil trading covers far more than you might think. It’s enough to mention that crude oil is at the heart of anything that has a combustion engine. Petrol, oil, diesel, even paraffin demand, all have an impact on this market. Although it may seem intimidating at first, it's quite the contrary because there are very good indicators that will tell you how oil trends usually fluctuate.
We at HighFxMarkets believe that oil trading can offer your portfolio many advantages, including:
- Oil is in a constant demand today.
- Cars never go out of fashion- and we are far from replacing their heavy
- While alternative energy sources haven't reached that level yet, Oil is
easy to produce and refine. This market is still going strong because we keep
making oil products.
- Fluctuating source production and finding new ones means that prices are
constantly changing and this creates and environments where you can leverage to
- Oil trading is a very liquid market.
Understanding the Oil Market
At first oil trades may seem intimidating, but in reality, they are very easy to understand and leverage them to your advantage. There are the key principles many traders have recognized: Firstly, know your two benchmarks. Brent Crude is a sweet, low Sulphur and light oil. It mostly comes from the European North Sea. WTI is also sweet and light, but it's made in the US. Both prices are typically reported.
Don’t underestimate politics! Usually you need to consider Europe, Russia, the US, and the OPEC countries (the Middle East and South America), and even China, as a rising player. If you’re in an oil producing country, you should consider global and domestic production. Remember drilling for oil is expensive and new techniques are regularly tested. Ultimately, demand should be taken into account as that is what drives the production. These are the driving factors determining the oil prices and considering them can be very helpful for your trading.
Always keep up with the news so you how these different factors are playing off of each other. You could have high global demand and low domestic one, OPEC could be withholding supplies, fracking sites could be opening. All of these will affect the oil market. Furthermore, some time spent with past market figures (while never indicative of future performance) will be imperative for you to understand the basics of the oil market and its quirks. Oil trading is not so hard, especially with our HighFxMarkets’s platform!