Crude Oil is one of the most widely traded commodities across globe. It has always been the most popular energy sector for trading.
The two primary oil markets are:
- US Crude WTI (West Texas Intermediate)
- UK Brent Crude
The UK Brent Crude is a sweet, light crude oil that originates from dozens of oilfields located in the North Sea. About 2/3 of all the crude contracts use Brent.
However, the US Crude WTI remains powerful when compared with the others as the USA is the highest producer of crude oil worldwide. The oil produced is sweeter and lighter than UK Brent. Its origin is from Cushing, Oklahoma and generally serves as a standard when it comes to oil pricing.
There are numerous reasons why traders show interest in crude oil trading despite it being a volatile industry. To understand why something becomes vital, we need to know a little bit about its history.
WHERE IT ALL BEGAN
1859
Crude oil took birth in the world in 1859 when George Bissell and Edwin L. Drake successfully drilled the Oil Creek site located near Titusville, Pennsylvania.
From 1901 to date, several places have been able to discover crude oil in their lands, such as Texas, Kuwait, Saudi Arabia, Iran, Iraq, and many more.
FACTORS THAT DETERMINE CRUDE OIL PRICING
OPEC
The Organization of the Petroleum Exporting Countries (OPEC) heavily impacts the supply and demand of the crude oil market. This intergovernmental organization of 13 nations altogether has largely taken control of the production, regulation, and supply of an oil barrel.
Other times, even Non-OPEC oil-producing countries affect the pricing of crude oil in the market.
Global Crisis
Natural disasters, wars, and political instabilities massively affect oil pricing worldwide. A famous example of such a global crisis would be the Hurricane Katrina disaster that caused severe damage to USA East Coast in 2005. It was then the oil prices rose to more than $70 per barrel.
The US Dollar
Similar to other commodities, oil is traded in the dollar across countries. Thus, the strengthening of the dollar weakens the oil trade, and vice versa.
Capitalxtend offers guidance and support for you to experience oil trading in low margins, tight spreads, and a deeper understanding of market analysis.
