Oil futures trading offers the ability to profit from energy sector volatility, but it is important for traders to understand what is driving prices so that they can make well-informed decisions. The leverage involved in this market – you need just 5% to purchase a 1,000 barrel contract – also makes losses a possibility, so it’s crucial that you take care with your risk capital.More info :theinvestorscentre.co.uk

The most common way to trade oil is via futures contracts, standardised agreements to exchange a commodity at a specific price on an agreed date. However, you can also trade other forms of the asset class, including spot prices and ETFs.

Top Strategies for Profitable Oil Futures Trading

When deciding on your investment strategy, you should consider the fundamentals of supply and demand and technical indicators gleaned from charts. But, as with any commodity, the broader political and economic landscape is another significant factor that can drive prices. Major news events can exacerbate movements in crude prices, such as tensions in the Middle East or a tightening supply situation.

The relationship between crude oil and other markets is complex, with correlations often reflecting a more primary influence than direct causation. For example, there may be a correlation between the prices of crude and stocks, but this can be caused by the same factors that impact the value of both assets. A number of sources are available to track oil inventory levels, including weekly reports from the U.S. Energy Information Administration (EIA), which provide insight into how much oil the country produces and uses.