Crude Oil

Tradable Oil Types:

When we talk about oil trading, the oil we generally mean is WTI, which is the abbreviation of WTI crude oil (also known as crude oil), as well as crude Brent oil, often referred to as Brent. In the US, while Brent crude is produced in the North Sea. Both are high quality oil, which means that once extracted from the ground they can be refined to be suitable for use for many different purposes. The uses include refining gasoline to separate cars, fueling electricity and heating, and using plastics, petrochemicals and other products. This means that both WTI and Brent crude are receiving ever-increasing demand worldwide and are therefore highly interrelated.

Major consumer countries:

At the global level, we find that the largest oil consuming countries are developed industrial countries such as the United States and European countries. However, over the past two decades, the Far East has seen a significant increase in consumption, and now China has become a major user.

The largest oil consuming countries include the United States, Japan, China, Germany and the United Kingdom, so when oil is traded we always need to keep an eye on major consuming nations to monitor whether the increase in demand will push towards higher prices, as well as lower demand will push towards lower prices (provided that supply levels remain consistent).

Key Reports:

The fact that oil has many uses means that it is one of the most volatile and volatile markets in the world. For traders, this presents great opportunities, but when trading oil we need to pay special attention to a wide range of supply and demand issues that are likely to have a significant impact on prices, in a very short time frame.

A famous example is when oil rose to a record high of US $145 in June 2008, but then fell to about US $ 30 by December of that same year. Standard result from a range of Factors, notably the disruption of supplies in Nigeria due to political factors, coupled with the belief that increased demand from developing countries such as China and India will outstrip supply.

However, in just a few months these fears have disappeared in the markets, US dollars, and then sharply to close to 30 US dollars, and this was a great opportunity for traders in all time frames.

Things to be absorbed:

  • Crude oil is a limited resource, and the vast majority of the world's reserves can be found in OPEC countries
  • WTI and Brent crude are among the world's most traded markets
  • Prices are determined by supply and demand factors that range from seasonal factors Political and economic issues alongside consumption from developing countries.
  • Key reports that oil traders should follow include Oil Department reports from the Department of Energy and OPEC reports.