What factors determine oil prices?
Oil price depends on a lot of geopolitical factors and reflects market participants’ sentiment. Countries, big companies, and traders can all be considered the players in the oil market.
For example: airline companies trade oil to hedge their risks for fuel price growth, whereas traders perform deals in order to make money from market fluctuations.
Oil prices are conditioned by the same factors as the exchange rates of currencies, i.e. political developments, financial events, and even weather.
On the forex market, oil CFDs are traded the same way as currency pairs, yet with a different leverage and margin level. One contract for delivery of a particular oil type corresponds to the price of 100 barrels of oil in the US dollars. On Forex such contracts are called contracts for difference and are classified as OTC financial instruments. They have an expiry date and all losses and gains are paid in cash.
On Forex, market participants can trade the following types of crude oil:
- heavy crude oil;
- light crude oil.
Moreover, sulfur level and oil density are also taken into account.
Apart from CFDs, market participants also trade oil futures. Our company offers two types of contracts:
- Brent Crude (light low-sulfur crude oil extracted from the North Sea);
- WTI (lighter low-sulfur crude oil extracted in West Texas).
For your information, the #XBZ symbol stands for Brent futures contract. The #CL symbol stands for WTI futures contract. Moreover, it is possible to trade mini contracts of a standard futures under the ticker symbol of #CL — miNY Crude Oil (#QM).
Follow the latest World Economy news and always keep yourself up-to-date with the oil market developments.