Oil is the lifeblood of the industrialised nations and has become the world's most important source of energy since the mid-1950s. Its products underpin modern society, mainly supplying energy to power industry, heat homes and provide fuel for vehicles and aeroplanes to carry goods and people all over the world.
Oil is also one of the most popularly traded commodities in the markets, due, in part, to price fluctuations depending on supply, and global economic factors. PrimeXBT award-winning platform offers a wide range of trading tools and strategies to make successful trades in the Oil market.
In order to make bigger profits with less capital in the Oil market, there is the opportunity on PrimeXBT to trade on margin. When you want to trade Oil, you don’t have to deposit the full amount of position value, instead you only use margin as insurance while PrimeXBT will provide you with additional capital to trade.
This leveraged margin trade then allows you to receive higher profits if the position goes the right way. However, the risk is that if the trade is unsuccessful the losses can be magnified too.
For example, If a trader takes a long position of $2,000 on the Oil and it rises by 10%, using 5x leverage the same rise becomes a 50% profit, or $1,000. A similar spot trade without leverage would result in only 10% profit, or $200.
Disclaimer: Margin trading also comes with inherent risks if the position moves against the trade. You should never utilize 100% leverage and never invest more than you can afford to lose.
Crude Oil is the unrefined, yellowish-blackish oily product composed of hydrocarbon deposits and other organic materials, is a fossil-fuel, and is traded as a commodity in financial markets.
Crude Oil is used to create petroleum and a number of fuel byproducts. As a commodity, its price fluctuates wildly depending on the environment, the weather, geopolitical economic factors, and more, making it the perfect asset for trading at a profit. PrimeXBT offers the trading of both BRENT oil and WTI Crude oil against the USD trading pair.
There are two types of Crude Oil available for trading on PrimeXBT. Here are the key differences.
BRENT Oil is the leading benchmark for Atlantic basin crude oils, representing the price of two-thirds of the world’s crude oil market. BRENT crude oil is extracted from the North Sea and contains more sulfur and is less light and sweet than its counterpart, WTI crude oil. BRENT oil is a favourite in European markets.
WTI Crude Oil or crude oil from the West Texas Intermediate stock name, is a light and sweet crude oil used as a benchmark for pricing Oil. WTI Crude Oil is lighter and sweeter than Brent oil, and contains less sulfur. WTI crude Oil is refined primarily from the Midwest and Gulf Coast region of the United States, and is the Oil type favoured in North America.
Oil is an important fuel in the energy commodities market, and a major economic driver for the countries that refine it. Here is a list of the world’s biggest producers of crude Oil, listed by production in billion cubic meters.
|Country||Production in Billion Cubic Meters|
|Saudi Arabia (OPEC)||12,000,000|
|United Arab Emirates (OPEC)||3,106,077|
Because so many factors can impact the price of Oil and cause the price of BRENT and WTI Crude Oil to fluctuate wildly, it makes for the perfect asset to trade on leverage. If the price of Oil is falling, opening up a short position can keep profits growing despite the market dropping. If Oil prices are rising, a long trade can lead to profit too.
Brent and WTI Crude Oil are commodities and vital energy resources, and their supply and demand can be affected by a number of factors, thus impacting price and causing it to rise and fall.
The price of both BRENT and WTI Crude Oil can be affected by a number of external factors, including OPEC, supply, global economic data, the price of the US dollar, the development of alternative power, the price of alternative fuel sources, and various political factors.
OPEC stands for the Organization of the Petroleum Exporting Countries – the organization consisting of 14 of the world’s major oil-producing countries that most of the world are purchasing their oil from. When any homeowner is buying oil, they are usually getting it from an OPEC nation. OPEC regulates the supply of petroleum, which can have an effect on the price of oil.
Oil is stored for use at a later date, or reserved for times when supply cannot keep up with demand. Oftentimes reserves can be depleted, or accidents at facilities can lead to a loss of stored reserves that can have an impact on the price of oil.
Different types of global economic data, such as data related to tariffs, debt, and even unemployment rates can have an impact on the price of Oil, as it’s among the most important and vital energy sources and its supply can affect many other industries that rely on it as a resource.
The value of the US dollar can have a dramatic impact on the price of Oil via the USD trading pair. Much like any asset paired against the US dollar, its value and power can influence the other asset it is paired against. USD is the most common currency paired with oil and other commodities.
As technology advances and the need for cleaner emissions with less impact on the environment become commonplace, this can have a dramatic effect on the price of Oil.
Not only does the development of these new energy forms impact Oil prices, but the prices of these new forms of power can have an adverse effect. The more the price of these new forms of energy comes down, it could reduce countries buying crude Oil stock and thus cause supply to outweigh demand.
Political factors, such as war, trade tensions, and more can have an enormous impact on the price of oil, especially if any of the OPEC nations are involved. These countries can influence the price of Oil across the globe, and oil is often used as a bartering chip.
PrimeXBT offers Oil trading of CFDs, also known as a contract for difference. This is a good option for those looking to gain exposure to Oil markets. By choosing CFDs on PrimeXBT over Oil futures trading, traders can avoid excessive broker fees from their futures contract and generate potentially better profit margins from positions they open.
PrimeXBT’s ultra-fast order execution and its stable, reliable trading engine ensures the tightest spreads and best trading experience. The trading platform is packed with advanced trading tools, such as long and short positions, advanced order types such as stop loss and take profit orders.
The platform is also safe, secure, and offers 24/7 customer support service via a live chat, community channels, and much more.
It’s free to open an account, and there is no obligation to
fund or trade.