Crude Oil Trading​

Oil is one of the world’s most widely traded and consumed commodities. Oil trading takes place across the world, as nearly all economies are reliant on oil to some extent.  Not only does oil provide the fuel for cars, trucks and other vehicles. Oil is also a raw material for many chemical and industrial processes and as such is almost indispensable to us.

Welcome to Oil Trading

Oil is one of the world’s most widely traded and consumed commodities. Oil trading takes place across the world, as nearly all economies are reliant on oil to some extent.  Not only does oil provide the fuel for cars, trucks and other vehicles. Oil is also a raw material for many chemical and industrial processes and as such is almost indispensable to us.

What happens to the price of oil and in oil trading matters on a global scale. You can trade oil through W-Tactic as a cash-settled CFD or Contract for Differences and we offer oil CFD contracts on both Brent and WTI crude oil.

Oil is traded in barrels each barrel contains 42 gallons or 158.98 litres of oil. The term barrel dates back to the late 19th century when a wooden barrel containing 42 gallons of crude oil became the standard unit for transportation and trading purposes. These days of course oil is transported in giant oil tankers or through pipelines.

Oil is traded in barrels each barrel contains 42 gallons or 158.98 litres of oil. The term barrel dates back to the late 19th century when a wooden barrel containing 42 gallons of crude oil became the standard unit for transportation and trading purposes. These days of course oil is transported in giant oil tankers or through pipelines.

Both WTI and Brent Crude oil are traded as futures contracts, WTI is traded on the New York Mercantile Exchange or NYMEX.  that is now part of the Chicago Mercantile Exchange or CME. Whilst Brent crude was traditionally traded on London’s IPE or International Petroleum Exchange, which is itself now part of ICE, the Intercontinental Exchange.

Supply and demand

Oil markets are global but just like all other commodities markets, oil prices are affected by changes in supply and demand.

On the supply side of the oil market, oil producers and consumers are often located at great distances from each other. For example, Mexico is an oil producer and China a large consumer of oil. Yet the two countries are 12,900 kilometres apart. So the costs and availability of transportation for crude oil are an important factor in establishing oil prices un the markets.

On the supply side of the oil market, oil producers and consumers are often located at great distances from each other. For example, Mexico is an oil producer and China a large consumer of oil. Yet the two countries are 12,900 kilometres apart. So the costs and availability of transportation for crude oil are an important factor in establishing oil prices un the markets.

Oil prices are also influenced by geopolitics and conflict particularly in relation to the Middle East, and by the actions of OPEC or the Organization of the Petroleum Exporting Countries and large volume oil producers such as Russia.

What time can you trade oil?

Crude oil is traded 24 hours a day five days per week with only short trading halts or breaks. Oil markets are becoming ever more active in Asia though the bulk of oil trading still takes place during European and US market hours. The ability to trade commodities like oil 24 hours a day means that our clients can react instantly to news flow and global events. without having to wait for exchanges to open. CFDs on oil are settled instantly with the appropriate credit or debit, once the contacts are closed and your account is immediately updated with your oil trading profit or loss.

CFDs are traded on leverage that is a client’s trading deposit is geared up or multiplied by their broker, allowing them to take a larger position in the market than their deposit would otherwise allow.  At US$30.00 per barrel, a standard lot of either WTI or Brent crude is worth US$30,000. However, with a leverage ratio of 10:1, you only need to have US$3,000 or ten percent of the contract value in your account. Of course, you don’t need to trade oil in whole lots either you trade in just a fraction of that size.

Is oil trading profitable?

We are often asked if oil trading is profitable. The answer to that question is, it can be.  However, traders need to respect the leverage they are using, because though that leverage is very good at magnifying trading profits it’s equally good at magnifying trading losses.

Not only do traders need to get the direction of their oil trading right, but they also need to size their trades appropriately. Crude oil has had a US$75.00 range over recent years and as a globally traded commodity crude oil prices are rarely static, which means there are always plenty of trading opportunities, in both directions long and short.