Crude Oil Prices & Investing
Everything you need to know about crude oil trading, along with strategies for investing in different market conditions. Understand fundamental and technical analysis, explore historical price trends, and identify factors influencing crude oil price movements. Learn about the different types of crude oil, trading strategies, and whether investing in crude oil is right for you.
How to Invest in Crude Oil Trading
3 Steps to Investing in Crude Oil:
Download Metatrader 4
Familiarize yourself with crude oil trading through a demo account on Metatrader 4 (MT4), the world’s leading trading platform. It provides access to a wide range of products, including indices, currencies, shares, and commodities.
Open a Demo Account
Start trading crude oil by opening a demo trading account with WisunoFX, a globally regulated broker ranked 3rd on Finance Magnates’ list based on traded volume on the MT4 platform. Join the crude oil investment action today!
Begin Crude Oil Trading
The traditional method of investing in crude oil involves entering the market and purchasing derivative products such as options, futures, or exchange-traded products (ETFs) for Brent Crude and West Texas Intermediate (WTI).
How to Trade Crude Oil
You can trade crude oil through various methods:
Futures
Predict oil price movements in the future.
Spot
Trade the current market price for oil.
ETFs
Track oil performance through exchange-traded futures contracts.
Options
Take advantage of active market volatility.
Single Stocks
Take long or short positions on oil companies.
Stocks
Buy shares of oil companies and receive dividends.
What is Crude Oil?
Crude Oil Definition
Crude oil is a mixture of hydrocarbons in liquid form, found in underground reservoirs (petroleum). It is essential for electricity, heating, and transportation, serving as the base for many products, commonly referred to as "black gold." Crude oil trading attracts investors due to its attractive dividend income, high volatility, and potential for share price appreciation.
Types of Crude Oil
1. Very Light
Includes gasoline and jet fuel; evaporates quickly.
2. Light
Used for fuel oils; considered volatile and toxic.
3. Medium
Most commonly used due to low volatility and high viscosity.
4. Heavy
The heaviest and most viscous type.
World's Benchmark for Crude Oil Prices
The two primary benchmarks for crude oil prices are:
WTI Crude Oil
Extracted and produced in the U.S., it is typically associated with lighter oils used for gasoline production.
Brent Crude Oil
Refined in Northwestern Europe, mainly used across Europe and Africa.
Crude oil price fluctuations are influenced by OPEC production decisions, geopolitical tensions, and crude stockpiles, impacting supply and demand.
Crude Oil Price Forecast
Goldman Sachs projects crude oil prices could rise to $90 per barrel, fueled by increased demand and decreased supply. Oil prices surged over 80% in 2021, and Brent Oil is currently above $80, the highest since 2014. Market sentiment remains bullish, with investor behavior influenced by economic conditions and travel demand.
Crude Oil Technical Analysis
Recent price trends have shown crude oil reaching three-year peaks due to output disruptions. The crude oil market has been trending upward, raising inflation concerns among investors. Key technical indicators suggest potential volatility, particularly in Brent and WTI prices, influenced by OPEC's output decisions.
What Affects Crude Oil Price Movements?
5 Key Factors
1. Geopolitics
Political stability and conflicts can significantly influence prices.
2. Supply and Demand
Increased demand drives prices up; excess supply leads to price drops.
3. OPEC
Increased demand drives prices up; excess supply leads to price drops.
4. Market Sentiment
Investor speculation impacts buying and selling behavior.
5. Consumer Consumption
Seasonal increases in driving and travel can raise demand and prices.
Is Crude Oil a Good Investment?
Crude oil attracts both day and long-term traders due to its liquidity and volatility, presenting numerous opportunities despite demand fluctuations. Investors can choose from various sectors, including refining, exploration, and distribution.
Crude Oil Trading Strategies:
Day Trading
Buy and sell oil within the same day to capitalize on small price movements.
Swing Trading
Hold positions for days or weeks, aiming to benefit from anticipated market changes.
Trend Trading
Follow the price direction, entering trades based on identified trends.
Position Trading
Long-term strategy involving holding positions for months or years based on market analysis.
Industry Essential
Crude oil is a crucial energy source with widespread industrial applications.
Strategic Position
Prices are highly volatile due to geopolitical and economic factors.
Enormous Trading Volume
Crude oil is recognized as the most traded commodity globally.
Crude Oil’s History
Understanding historical price movements can reveal significant investment opportunities.
1. Open Your Account
Complete the Live Trading Account application. After identity verification, your account will be set up.
2. Fund Your Account
Deposit funds using a credit card, E-Wallet, or bank transfer to begin trading.
3. Start Trading
Trade on any device, including PC, Android, iPad, iPhone, or via a web browser.
FREQUENTLY ASKED QUESTIONS
US Oil （WTI）
UK Oil （Brent）
Saudi Arabia
USA
Russia
Canada
China
Market timings vary depending on the product and contract type （spot rate or futures contract）。 You can check the timings on Metatrader 4 （MT4） by right-clicking on the product （e.g.,‘WTI’） and selecting ‘Specifications’。
For example （based on MT4 server time）：
Brent contract trade timings: 03:01-23:59 （Friday 23:55）
WTI contract trade timings: 01:01-23:59
WTI Futures: 01:01-23:59
