4 reasons why crude oil Is traded
Crude oil is a liquid fossil fuel, often referred to as ‘black gold’. It is a non-renewable energy source, which is one of the main causes of its heavy fluctuations in prices, but its influence on the global markets makes it an attractive option for traders. There are many advantages to trading crude oil:
- It provides excellent potential opportunities due to its importance and unique position in the global economy, with a generally consistent high demand.
- Oil markets are typically highly liquid. This liquidity ensures that you can enter and exit trades with ease, minimizing the risk of price manipulation and ensuring fair market prices.
- Due to the high volatility of the oil markets and trading with leverage products such as CFDs, there is increased potential opportunity but also increased risk. Since increased leverage increases risk, it is essential to have an effective risk management strategy.
- Lastly, there is a wealth of information available on crude oil markets, including news, analysis, and expert opinions, helping traders make informed decisions and stay updated on market trends.
Learn more about what is commodity trading in our dedicated page.
Why invest in crude oil at FOREX.com
Trading crude oil could be a rewarding venture for those who understand the market dynamics and are prepared to manage the associated risks. Whether you're looking to diversify your portfolio, hedge against other investments, or capitalize on market movements, FOREX.com offers a range of potential opportunities.
There are two main ways you can trade oil with us through CFDs:
- Futures contracts are standardized agreements to exchange oil for a set price on an agreed date. They are used to price oil markets, so when you buy or sell oil via other means – including spot prices – you’ll still be exposed to the underlying oil futures.
- Spot oil markets represent the price of a barrel if you bought or sold it at that exact moment in time. It is a short-term transaction, where settlement occurs almost instantly. These commodity markets are non-expiring, so you’ll get continuous crude oil prices with no need to roll your position over.
Trading oil CFDs
With FOREX.com you can trade oil futures and spot prices using CFDs. You won’t be required to take delivery of an asset when the contract matures and can choose whether to roll over your futures positions.
Trading oil CFDs can be more cost effective than buying contracts, as you can open a position for just a fraction of the actual cost – known as leveraging your position. Leverage can magnify your profits, but it can also magnify your risk so it’s important to manage your risk appropriately.
Still not sure where to start? Learn more about what crude oil is and how to trade crude oil in our dedicated pages.
Start trading crude oil today
With FOREX.com, all you have to do to trade crude oil is:
- Open an account
- Check crude oil prices
- Take a position
- Analyze and monitor the trade with our award-winning mobile apps
Interested in other commodities? Learn how to trade commodities with FOREX.com.
How to open your account
Opening an account with FOREX.com is simple and straightforward, you’ll start trading in just a few steps.
- Apply for a trading account.
We’ll ask for a few details so we can verify your identity.
Open an account - Fund your account easily and securely.
Choose the platform that suits you best, through our online portal or our app.
How to fund your account - Start trading our full range of markets.
Choose from a range of commodities with improved liquidity and variable spreads.
Why trade commodities
Crude oil price forecast
As part of your crude oil trading strategy, it is important to regularly follow the crude oil price forecast. This involves:
Checking live oil prices
Stay ahead of the market with our Crude Oil live charts - track price swings in real-time and seize potential opportunity.
Understanding what moves the price of oil
Crude oil prices are determined by supply and demand. As the global economy is so dependent on the commodity, any changes in the supply of oil can have huge consequences and even lead to political unrest. The main influences on the supply and demand of oil are OPEC producers, geopolitics and natural disasters, global economic health and renewable energy competition, among others.
Following up on the news and analysis on FOREX.com
From crude oil price history to the latest news and analysis, FOREX.com offers deep insights into the crude oil market, helping you stay up to date on market trends and developments.
OPEC countries and its economic indicators
The Organization of the Petroleum Exporting Countries (OPEC) is a group of 13 of the world’s largest oil-exporting nations. It was founded in 1960 to coordinate petroleum policies and create a support system between the founding countries.
OPEC sets production targets for its members. By increasing or decreasing oil production, it can influence global oil supply and, consequently, prices. The economies of OPEC countries are heavily dependent on oil revenues and changes in oil prices can significantly impact their economic stability and development.