While the renewable energy commodities trading is gaining popularity, crude oil is becoming the most traded commodity in this category as oil is one of the key resources of the world. What makes it so popular is the volatility of Oil, which provides traders with many opportunities. Investors trade oil to diversify their portfolios and hedge investments in other assets. Another reason for trading oil is that it is more accessible as its available 24 hours a day, 5 days a week and can be entirely done online.
Crude oil trading in India actually the most active trading which involves the traded commodities contract, with a futures contract value of over Rs. 3,000 crores on MCX (Multi Commodity Exchange) daily. With the trading volume that high, investors can make huge profits. However, some of the investors still feel sceptical about Crude oil trading in India because there are trading risks involved. So, to help the investors, we’ll uncover all the aspects of crude oil trading!
The global economy relies on the trade of crude oil and directly or indirectly, everyone is a crude oil consumer. Whether it's medicines, sports items, tea, or even laptops and PCs, petrochemicals are used everywhere, which makes crude oil essential in our lives.
Middle eastern countries reserve about 48% of the crude oil, while OPEC (organization of petroleum exporting countries) covers 40% of the global crude oil production. There are 13 member countries under OPEC.
You can start trading crude oil with a minimum deposit and benefit from the high market volatility. However, before you start trading crude oil – understand what it is and how the markets work. Let’s start with a basic definition, types and then we can discuss how you can trade crude oil online –
What is Crude Oil?
Crude Oil, also know as the Black Gold of the financial world, is a naturally occurring commodity i.e., a raw petroleum product that is refined to produce gasoline, diesel, heating oil, and many other petrochemicals.
Types of Crude Oil
· Brent Crude
· West Texas Intermediate (WTI)
· Dubai or Oman
Brent and WTI are the standards through which the crude oil commodity is traded. Both of these have variations in their characteristics which include sulfur composition, weight, location of extraction, and more.
Talking about crude from the Indian perspective, Brent crude is traded on the Multi Commodity Exchange of India Pvt. Ltd. (MCX) and/or there’s also National Commodity & Derivatives Exchange (NCDEX).
An average of over RS. 3000 crores worth of crude oil [MCX futures/contracts] is traded every single day, usually in batches of 10 barrels & 100 barrels.
How much money can I invest in crude oil Trading?
Oil CFD trading is considered one of the most popular ways to invest in crude oil. With CFD oil trading, you can easily start trading oil with lowest initial capital. Your investment will also depends on the trading margin.
For example, if there is a 10% margin, then you would only have to deposit 10% of the trade’s total value and then you can open a position, the rest will be covered by Capitalxtend.
So, for instance, you want to trade for $1000, then in this case, you actually only have to deposit just $100 as an initial deposit to trade oil.
How and where to buy crude oil stock?
If you have decided to invest in crude oil and are wondering, where can I buy crude oil stock, here’s the step-by-step guide to help you start investing in oil.
You can start investing in crude oil with Capitalxtend in these easy steps –
· Learn how the crude oil markets work
· Open a live trading account with Capitalxtend
· Select where and what you want to trade i.e., WTI, Brent, or others.
· Fund your trading account to start trading
· Open your first trading position!
What is the best time to trade crude oil?
The best time to trade crude oil depends on what the balance between demand & supply is at currently. There can be supply cuts by OPEC, which can lead to a price rise, which is if the demand stays the same. And vice versa, if you see supply increase, then the prices fall.
The most popular time to trade oil online is between 1 pm & 6.30 pm (GMT) – this is when the NYMEX (New York Mercantile Exchange) is open. During this period, the market experiences high liquidity.
If you are a beginner, you can also start with a free demo account to learn how oil trading works. With this, you will gain the confidence to trade and then you can move to a live account to trade in the real-time markets!
The market volatility, price movements, and liquidity make crude oil trading highly profitable. You can generate profits too if you learn how the oil markets work and trade with confidence.
With Capitalxtend, you get access to hundreds and thousands of trading opportunities in the world’s most popular and most traded markets. You get to trade with the fastest execution speed, lowest spreads, and intuitive trading tools.
Start with Capitalxtend’s free demo account to gain trading confidence and then enter the real-time markets.