The oil has been a central trading commodity for a long time. We at Fix Market will help you weight its benefits and risks and decide whether it can be a useful part of your portfolio.
It is more than just oil, even though it’s traditionally termed “oil trading”. It combines many elements, as oil really stands for crude oil, and this is a part of many products – diesel, oil petrol, paraffin. Demand for each of these products impacts the market. Is this too complex? There are many factors that influence this market, but among them you can find ones that work as relatively reliable indicators of future fluctuations.
What are the benefits of oil trading? Fix Market believes there are many, including:
•A stable demand – cars will not go out of fashion soon. They require a lot of energy and oil-based fuels are still not replaced as an energy source.
•The oil production pipeline is streamlined and easy – unlike most alternative energy sources. The supply is thus steady, which keeps the market in consistently good shape.
•Nevertheless, production fluctuates, and new sources are discovered. Thus prices also fluctuate – this is an essential element in a market that can allow you to benefit.
We admit it seems like a complex market. At the same time it’s not complex to gain advantage from it, if you are aware of a small number of principles.
First of all – know the basic benchmarks. WTI is light, sweet, and made in the USA. Bench Crude is light, sweet and low-sulphur, and made in Europe (in the North Sea). The prices of both are reported.
Second – know the political background. You need to be informed about relations among the Middle East and South America (OPEC), the US, Europe, Russia, and, lately – China. If you’re in a country which produces oil, do not disregard global production.
Don’t forget that new technologies are always developed in this field to ease drilling. Keep yourself updated.
And one last pointer – in this field, as in others, demand is a main driver behind production.
Keep in mind these main parameters and you will be on a good track with your trading. It is important to really follow the news on these factors. Maybe you have high domestic demand, or high global and low domestic demand. Maybe OPEC countries stop supplies. Or there are new fracking areas. It is also important to learn from history, even though it will never be sufficient to predict current patterns. However, historical market knowledge will give you insight into the habits of this market and good trading strategies.
And finally, if you use our Fix Market platform, you’re sure to have an easier oil trading experience.