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When trading oil, you want to properly speculate on whether the price of oil will rise or fall. The value of an asset is mainly determined by market supply and demand. When more people buy oil than sell it, the price goes up. On the contrary, if more people sell oil, the price will fall. Experienced traders in this field usually take full advantage of these price fluctuations.

For those who don't know, we will give you a practical example of how oil trading works:

•     Brent crude oil is priced at $37 per barrel
•     You have a feeling that this price is going to rise
•     With this in mind, you place a buy order worth $500
•     You have speculated correctly - Brent crude oil now costs 56 USD per barrel
•     This price increase shows us that the value of Brent crude oil has increased by 61.35%.
•     As a result, you decide to place a sell order to secure your profit
•     Your order now has a value of 806.75 USD
•     With your stake of 500 USD you have made profits of 306.75 USD on this trade.

As you can see from our example, you have made the right decision - making a healthy profit of 306.75 USD.

CFD Oil trading

To access the markets and start trading oil, you need a good broker. We've listed our top 5 oil trading brokers further down this page. You will probably be trading oil via CFDs in https://exnesslatam.com/pt-br/ that monitor price shifts of the asset. Consequently, you won't have to take possession of huge barrels of oil, which would be a logistical nightmare.

Energies like coal and oil have kept the world moving for many years. However, the oil industry we know today can be traced back to the late 1830s when the Industrial Revolution began.

Fast forward to 2021 and oil is one of the most volatile commodities out there. Globally, we consume an incredible 95 million barrels every day! Supply and demand are one of the key factors in asset values, so oil regularly sees large price swings.

Do you feel like trading this tempting commodity? The good news is that this asset is no longer the preserve of market bigwigs, institutional traders and hedge funds. If you follow guides like ours and do some of your own research, you'll be trading oil like a pro before you know it!

In addition, the huge price shifts in the market make it beneficial for short-term traders. When trading this commodity online, traders can make profits from rising markets as well as when the value of the asset drops.

If oil trading sounds like something you might be interested in, stay right where you are. We will examine how oil is traded, cover popular strategies, and of course discuss the best oil trading brokers of 2021.

What drives the cost of oil?

Understanding what makes the value of oil fluctuate can really help you when it comes to trading decision making - and, of course, profits. We mentioned earlier that the price of an asset tends to shift based on supply and demand. Your goal as an oil trader is to predict whether that price will rise or fall. Below is a list of the key factors affecting the trading price of oil.