There are a huge number of factors that can impact oil supply and demand, we’ve taken a look at four of the most common below. IG International Limited is licensed to conduct investment business and digital asset business by the Bermuda Monetary Authority. However, uncertainties remain linked to certain factors such as trade policy and labor dynamics. For example, potential tariffs on imports of used cooking oil from China, along with the potential for changing US biofuel subsidies, could reshape agricultural flows, especially for soybean oil.
Metals and mining
This can be done by buying the physical commodity, or speculating on its price. As oil is a finite resource, its price can see massive fluctuations due to supply and demand changes. We have the latest live crude oil prices, crude oil price charts and essential information for trading the price of oil. Unlike any other trading instrument oil prices are highly volatile and fluctate in large moves when affected by news.
In the coming years, we expect that growing adoption of digital tools and strategies by commodity traders will contribute to a performance gap that echoes what can already be observed in equities. The negative price outlook platforme de trading for many metal commodities in 2024 means that producers saw trading margins compress. However, overall margin pools stayed flat as asset-light trading houses were able to outdo their 2023 performance by focusing on back-to-back trades and high-demand metals. After a period of exceptional profits, commodity trading markets are starting to normalize, causing industry-wide margins to stagnate or even recede. Our research shows commodity traders generated more than $100 billion EBIT in 2023, and 2024 earnings indicate industry value pools decreased by more than 30 percent year over year, with 2025 shaping up to look much the same.
How to capture the next S-curve in commodity trading
It is also worth noting that XTB clients’ funds are being kept in segregated accounts, which means that they are separated from the company’s funds. We are constantly working on the development of our proprietary and award-winning trading platform to make sure it suits all your needs. Stay on top of upcoming market-moving events with our customisable economic calendar.
When you trade US Crude oil options, you’ll be trading the price of oil options via spread bets or CFDs. Options can be a great way to take control over your leverage – as you wouldn’t lose more than your initial outlay. West Texas Intermediate (WTI) crude oil is a specific grade of crude oil and one of the main benchmarks in oil pricing. This light, sweet crude oil is a vital indicator of global oil markets and the energy sector. Inside oil prices you will find the latest prices including live crude oil price, brent oil and heating oil price charts.
Some incumbent traders successfully protected access to in-demand nonferrous metals such as copper and lithium by locking in long-term contracts with miners and metals processors, offering prefinancing and investing in critical logistics assets. As a result, there are increased opportunities for new trading entrants to capture market share of ore, concentrates, and refined metals. On an international level there are a number of different types of crude oil, each of which have different properties and prices. The different types of crude oil come from regions as diverse as Alaska North Lope, Arab Light or Zueitina in Libya. For the purposes of trading on futures exchanges in London or New York, however, reference oils are used.
What is the best commodity to invest in?
- Volatility signals are generated when there is a substantial increase in market volatility, often triggered by major economic reports or geopolitical events.
- The most important type of crude oil used in Europe is Brent Crude, named after the North Sea oilfield where it is extracted.
- These signals indicate potential large price movements, and traders can adjust their strategies accordingly.
Broadly speaking, price volatility also decreased, with 2024 presenting a more nuanced market environment. Crude oil is by far the world’s most important energy source and the price of oil therefore plays an important role in industrial and economic development. Oil spot prices represent the cost of buying or selling oil immediately, or ‘on the spot’ – instead of at a set date in the future. While futures prices reflect how much the markets believe oil will be worth when the future expires, spot prices show how much it is worth right now. Discover how to trade oil with our step-by-step guide – including what spot prices and oil futures are, what moves the price of oil and the ways you can trade with us.
These are standardised products used to determine the prices for all other types. Because the supply of crude oil is limited but demand is constantly increasing, the price of oil is also continuously rising. The Best ev stocks US investment bank Goldman Sachs estimates the proportion of crude oil used for primary materials production to be 45 per cent.
About Light Crude Oil Futures
- Brent markets have broken above a shooting star from the previous session, which of course is a very bullish sign.
- Oil traders often use economic data releases to understand the health of an economy – such as GDP and employment figures.
- Nonetheless, LNG faces potential disruptions driven by factors including geopolitics (such as changes in trade policies), shifts in gas supply sources, or the reemergence of major suppliers in global markets.
Crude oil futures traded lower on Wednesday morning after Russia agreed to a proposal by the US to halt attacks on Ukraine’s energy infrastructure temporarily. News events such as changes in government policies, sanctions, or trade agreements can cause shifts in sentiment. For example, if a major oil-producing country is hit with sanctions, it may reduce the supply of oil, causing an increase in prices. You’ll need to choose whether to buy or sell the market – depending on whether you 3 sustainable water stocks for your portfolio think oil will rise or fall in price – and decide on your position size, which will determine the margin you pay. As climate change moves to the forefront of global conversations, energy companies are increasingly under pressure to find new ways to generate power. The move toward alternative resources – such as solar, wind and hydroelectric – could lower demand for oil.
Looking ahead, the increasing uncertainty about demand development, alongside renewables penetration and regulatory uncertainties, could drive volatility and risk premiums. Meanwhile, global power and gas markets have continued to liberalize, becoming increasingly complex and data-driven. Leading traders have expanded operations across commodities, markets, and geographies, profiting from a more sophisticated understanding of interconnected markets. A successful response to this new, leaner environment likely requires the embrace of new tools and revised operating models, both of which can help traders better quantify and manage price exposure and other key risks. This article examines the state of the industry across a number of core commodities and subsequently explores how industry players can best position themselves to capture the next S-curve in commodity trading. At 9.57 am on Wednesday, May Brent oil futures were at $70.33, down by 0.33 per cent, and May crude oil futures on WTI (West Texas Intermediate) were at $66.52, down by 0.34 per cent.
The evolution of commodity trading demands a more versatile approach to identifying new ways to secure optionality in supply and demand and hence value creation opportunities across markets. An effective approach to originating new business not only helps increase the volume of trades but also builds exposure to stable sources of income with reliable counterparties. Independent traders have already embraced the organizational creativity needed to effectively originate new business. It is now increasingly critical for asset-backed traders and producers to innovate and find nuanced ways to commercialize their blend of assets and trading capabilities. Growing demand from the energy transition and data centers has offered incentives to mining companies and metal refiners alike to bring supply online faster than previously expected.
Futures are used by companies to lock in an advantageous price for oil and hedge against adverse price movements. However, they’re popular among speculative traders too as there is no need to take delivery of barrels of oil – although you have to fulfil the contract, this can be via a cash settlement. Other factors will also affect the price of oil, such as the strength of the US dollar or any possible trade disputes between key oil producers – such as the US and Russia.
Historical Prices for Oil (Brent)
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