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Crude oil remains a robust and widely traded international commodity.
The price of crude oil has remained within a relatively tight range, on average, from February 2011 through February 2012. The 1-year change was registered at 11.49%, with the largest price fluctuations coming during January 2012 and February 2012. The latter months saw the price steadily move from under $100 per barrel to touch on $110 per barrel, only to dip slightly in recent days. This precious commodity – black gold – ranks among the most widely-watched markets in the world.
Crude oil futures are plenty popular and traders punt on this asset day in, and day out. Crude oil is traded in barrels against the US Dollar. Trading in crude oil is a high risk, high reward activity. Day traders, hedgers and speculators watch the crude oil market with a keen interest. Note that it is not necessary to purchase actual barrels of oil, rather oil is purchased in lots online. A mini-lot is 100 units, although eToro gives traders the option of trading micro-lots of 10 units. The volatility of crude oil is affected by supply and demand considerations, political tensions and global economics, among others. Oil can be traded in spot transactions and futures contracts. Crude oil is actively traded online, in large volumes, by international traders the world over. The IPE (International Petroleum Exchange) and the NYMEX are two examples of such trading exchanges. The main reason behind the popularity of oil trading, especially among currency traders, is that it enables them to diversify their portfolio with a relatively high gain commodity, as opposed to precious metals such as silver and gold.
For as long as crude oil has been used as fuel there have been oil trading companies that enabled individual traders to speculate on oil prices. Crude oil is a relatively new commodity, unlike gold, silver or gas, since it is only with the invention of the fuel powered automobile that oil has become a valuable resource and sprouted an international industry around its mining and processing. Today there are thousands of firms and jobs depending on crude oil, despite the growing awareness that our dependence on oil is extremely problematic seeing as it is a non-renewable resource. Most countries in the world depend heavily on oil and yet only a few countries have significant oil resources. This makes crude oil a politically influenced commodity because there are factors outside the economic policy spectrum that can affect its market price. Apart from economic announcements, you must pay attention to major foreign policy decisions when decided which way the oil market is going to turn. A current example of such foreign policy issues to follow would be tensions between America and Iran, as well as the Arab Spring revolutions and their consequences. You can check out the eToro blog for updates on events that affect oil trading.
Crude oil is traded in barrels against the USD. Of course thanks to the advent of the internet you don’t actually have to pay cash and then roll your barrel of oil home. Online oil trading has made it possible to buy hundreds of barrels of oil at the click of a button. As with Forex trading, our brokers take no commission on oil trading, their only commission being the spread between the buy and sell exchange rates. If you have developed your own technical analysis system or strategies for FX, it will work the same way for crude oil trading, with inevitable adjustments based on price range and the economic and political factors mentioned above. To learn more about oil futures trading, we recommend that you visit the eToro blog and the eToro OpenBook for in-depth oil market analysis and discussion groups on the subject of oil trading.
eToro provides a state-of-the-art online trading platform for experienced top traders and novice oil traders alike. This established online trading enterprise has garnered the respect of a large global trader base by providing a see, follow and copy platform for traders. The eToro OpenBook makes it easy for traders to enter the crude oil markets because it enables traders to essentially harness the collective genius of a global trader base – in real time.
eToro OpenBook features high levels of interactivity, courtesy of such features as Guru Finder, CopyTrader and the trader discussion boards. These tools make it quick and easy to interact with, follow and copy the most successful oil traders on the market. eToro OpenBook’s live trading feeds provide invaluable information on market movements, courtesy of successful traders online. Investors can sift through the feeds to satisfy their oil trading curiosity with various filters such as Markets, their own Watch List, the Top100 selection, and message boards. The GuruFinder feature allows traders to seek out and select other successful oil traders and then copy their trades automatically.
eToro also provides tremendous leveraging potential to crude oil traders. Leverage allows investors to trade positions significantly larger than the available funds in an account. This provides added profit potential on oil trading. Traders can calculate their leverage by dividing the position size by the used margin. With oil trading at eToro, the maximal leverage is x 50, which means that traders can open an oil trading position with less than $30, by trading micro-lots. This makes it easier for traders to diversify their portfolios with crude oil trading.