The scope in oil trading has always been brighter. Investors all around the world consider oil trading as “black gold”. The volatility in oil trading has been attractive for traders, to take a chance in trying their luck and expertise to earn huge profits. Due to tech advancement, now there are AI-supported platforms like oil profit that ensure the profitability element while trading crude oil.
The commodity market has been dominated by crude oil trading, commodities like precious metals, Agri commodities, and base metals are have always been less volatile and profitable as compared to oil trading.
The reliance of the world economy on oil distribution has been non-negligible. Different countries around the world take oil trading as a great matter of concern, especially those who rely on its imports. Oil trading is surely a profitable commodity as it works as one of the economic growth indicators for developed and undeveloped nations.
Factors that influence the oil price
The current level of oil output plays a major role in determining oil price fluctuation, and the supply is usually set by the “Organization of petroleum exporting countries”. As the supply increases more than the desired output the price goes down, the balance between demand and supply is the key element in determining oil prices.
Those countries whose economy is not strong enough to cope up with the rising oil prices tend to keep a huge oil reserve in order to stabilize the rate of inflation in difficult times when the economy faces oil scarcity, and oil reserves are released in order to stabilize the oil price.
The demand for crude oil is also one of the factors that influence price, as price goes up in winter due to an increase in the use of oil for heating, whereas, in summer, oil prices also tend to rise as American plan vacations and hence the demand for crude oil rises.
Important tips regarding crude oil trading
Trading is a science, which takes years of experience to gain a grip over it. Investment opportunities like crypto, forex, or stocks have their own experts who have spent years understanding the market trends and price speculation. Same like this, there are experts who are good at using the market as a hedge against other markets. These experts have a strong grip over understanding geopolitical scenarios. Hence it is wise to advisors or experts who can help you understand the market ecosystem.
The investors must also learn the impact of the socio-economic and political trends on oil prices, this would help to analyze the right time to invest and the right to hold back. For example, somewhere in the world, if oil-producing countries are trying to dominate each other industry war, then prices are most likely to go up.
Another important thing to consider in order to understand the crude oil market more deeply is knowing the difference between different types of crude oil. Like Brent and West Texas instrument (WTI). Bent is an oil produced offshore, whereas, WTI is produced within the physical boundary of the US. Brent oil is mostly imported by India whereas other nations utilize WTI. For investors, it is important to know the performance of each type.