OIL PRICES

Crude oil is one of the most in-demand commodities, with the two most popularly traded grades of oil prices being Brent Crude and West Texas Intermediate (WTI). Oil prices reflect the market’s volatile and liquid nature, as well as oil being a benchmark for global economic activity. The oil price charts offer live data and comprehensive price action on WTI Crude and Brent Crude patterns. Get information here on key pivot points, support and resistance and crude oil news.

OIL PRICES: Recent Events

The price of oil decreased substantially in 2020 due to the COVID-19 pandemic and the 2020 Russia–Saudi Arabia oil price war. On 20 April, WTI Crude futures contracts dropped below $0 for the first time in history. Oil Prices collapse into negative prices on Monday was a clear warning of just how scarce storage space for oil is getting. The following day Brent Crude fell below $20 per barrel.

"It will take time and money to turn it back on. It's not like a light switch," David Trainer, CEO of New Constructs, an investment research firm based in Nashville.

The outbreak of Coronavirus impacted the oil price as many people are staying home. The social-distancing and stay-at-home orders are thought to partly be one of the major factors that crippled the oil price market in the first place. Return of the oil boom is speculated to be coming in the next few months as the world reopen after COVID-19 lockdowns. The demand of oil is thought by experts to return and in turn increase oil prices in the coming months.

"When demand comes back online, there won't be as many people there to make the oil," said Trainer.

How does trading oil prices work?

When you trade oil, you’re not buying any physical oil. Instead, you’re simply trading on the realtime oil price movements of the commodity. This type of trade is known as a Contract For Difference, or CFD.

Example 1: Profiting from a oil price increase

Let’s say you buy an oil price contract at a current market price of US$31.48 per barrel, believing the market price will rise by a certain time. If the oil price has risen at the expiry of the contract, you’ll make a profit based on the difference between the buy and sell price. However, if oil price falls below the buy price at the point when the contract expires, you’ll lose the trade.

Example 2: Profiting from a oil price decrease

Let’s again say you want to buy an oil price contract at US$31.48 a barrel, but this time believed the price will fall. If it fell by the time of the contract expiry, you’d make a profit. If it had risen, you’d incur a loss.

Profiting from downward oil price movements is one of the unique aspects of CFD trading; if you were purchasing physical barrels of oil you could only profit by selling the oil for more than you paid for it.

Why Trade Oil Prices?