Oil is a commodity asset of high volatility. This is a key energy carrier with stable, high demand. Also, oil can be safely called one of the most promising exchange-traded assets that can be traded on NS Broker, and here’s why:
- the medium-term value of black gold is fairly easily predicted through analysis of fundamental factors;
- dependence of prices on geopolitical factors;
- private traders rarely turn to commodity assets, as a result of which there is practically no market noise.
It’s worth mentioning right away that there is no commodity trading in the OTC Forex market. Traders are solely interested in making a profit through pricing, which is why brokers offer deals with CFDs. Quite not all trustworthy intermediary companies are ready to offer clients earnings on commodity assets. Most people prefer to confine themselves to familiar currency pairs, cryptocurrencies and precious metals, therefore, for trading CFDs on oil, it is recommended to pay attention to the following verified brokers:
- Alpari Limited;
- FxPro;
- HYCM.
These companies are licensed by competent regulators, which guarantees the protection of private traders from non-trading risks. Also, to make money on black gold pricing, you can consider cooperation with stock brokers who are ready to provide traders with access to the New York and London exchanges. These sites for 2019 are leaders in terms of oil futures trading volumes.
In this article, we will consider the key features of oil as an exchange asset, and also talk about the most effective trading methods that even a novice trader who is going to work with NSBroker for the first time can apply in practice.
What specific factors are important to consider?
- Weather. No matter how strange this may sound, global warming can significantly affect the cost of fossil hydrocarbons amid reduced demand and an oversupply of supplies. Climate forecasts should be considered only if long-term trading in black gold is planned.
- Geopolitical. Arrangements between the heads of oil producing states have a direct impact on the price of oil. It is important to understand that the ratio of supply and demand has a key influence on the value of any product. In 2019, a steady overabundance of hydrocarbons was formed on the world market. In other words, supply confidently exceeds demand. This state of affairs is forcing heads of oil and gas companies and heads of state to regulate oil production to stabilize prices. Thus, to determine the medium-term trend, it will be necessary to wait for an increase or decrease in production volumes. 20% of the current value is enough to open a deal (increase in volume is a downtrend, decrease is an upward one). The necessary information can be obtained from the news or official reports of specialized enterprises, but it is best to visit the official websites of large oil and gas companies and get acquainted with the documentation published in the public domain. Information on the planned volumes of oil production is not a commercial secret and is always available for public viewing.
- Changes in crude oil reserves. The USA and Russia regularly publish relevant reports. This factor is not so much fundamental as market. Since oil is a stock exchange asset, large investment companies monitor the publication of information on black gold reserves. The news of a significant decrease in this indicator may become a reason for a change in the trend against the backdrop of a change in the mood of large bidders.
- Volatility. It is important for proponents of short- and medium-term trading that changes in the cost of oil during the day can range from 1-4%.
