Posts Tagged ‘Crude oil’

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What Moves the Oil Price?

Oil is a vital commodity in the world. What affects its price? The price of the oil is driven by two key factors, supply and demand. When the supply of the oil into the markets increase, the price will fall. When the supply decreases, then the oil price will rise. The supply is driven by three factors. OPEC: OPEC stands for The Organization of the Petroleum Exporting Countries. The OPEC has fourteen members and sets production quotas for them. […]

How to Trade Oil

The following are the four main approaches to trade oil. Futures: You can buy or sell oil using futures contracts at a set price on a set date. You take the delivery of the oil or cash at the expiry date. Options: You enter a contract on a set date at a set price. You have the right, but not the obligation to trade., to uphold the contract at expiry. You can also let the option expire worthless. Spot prices: You […]

Why Do Oil Prices Have Such a Big Impact on the Canadian Dollar?

The Canadian dollar is very sensitive to changes in oil prices. As you can see from this example, there exists such a strong correlation between the Crude Oil, and the Canadian dollar. These are the reasons behind such strong correlation. Canada's economy is largely dependent on the oil it produces. Crude petroleum contributes to 14% of Canada's total exports. So, 98% of the quantity that it produces is exported to the US. […]

Negative Oil Prices Explained in One Minute: From Demand Shock to Futures Market "Fine Print"

Investors were shocked to see oil prices nose dived and entered into negative territory. Oil cannot be seen as gold due to the following reasons. The need for large storage facility It degrades over time. It cannot be considered as a store of value. With the quarantine measures in place across the world due to the Coronavirus situation and the slowdown in the economy, the demand for oil has decreased. Hence, more capacity is needed to store […]

Price Action Analysis of the Oil Chart in the Middle of the USA-Iran Tension — Part 2

This is part 2 of the series. This video focuses on how fundamental impacts on the price action on the chart by means of simple patterns. As you can see on the chart, the market took off from this solid low after the drone attack. However, further escalation was prevented by the headlines by Donald Trump. This caused the price to fall strongly. As you can see, the market closed with this hybrid fractal bar at the outward […]

Price Action Analysis of the Oil Chart in the Middle of the USA-Iran Tension

In this video, you will see a price action analysis of the oil chart in the middle of the USA-Iran tension. Recently, the assassination of the Iranian general by the US has dominated the headlines. This incident had a significant impact on the oil price and the US stock market. It also influences other financial markets as well. So, investments will flow towards more secure assets like gold. Also, the cryptocurrency market is to gain from this […]

Oil Price vs Canadian Dollar Graph | The Correlation Between Oil & CAD

In this video, you will learn about the correlation between the Canadian dollar, and the Crude Oil. Canada is a major exporter of Crude Oil. It has increased its capacity in production and is supplying about 6 million barrels per day. It has 173 billion barrels in its oil reserves. However, Canada is not a member of OPEC. About 99% of its exports goes to US. Hence, Canada's economy […]

How to Trade the Oil Markets? — 3 Common Ways Explained

There are several ways to trade and invest in the oil markets. Oil as a commodity, Oil ETFs, Oil & Gas indices, and shares in the individual companies. Trading the price of oil is the most common way. There are many classifications covering varying degrees of quality and sulphurous content, but two benchmarks are widely used. Brent and US Light Crude. Brent is the classification that covers oil that has been […]

What Moves the Price of Oil?

There are a number of factors that affect the price oil oil. Simple economics of demand and supply, exogenous or unexpected shocks, alternative energy sources, the movement of the dollar and market speculation. When economic activity increases in an economy, demand for oil rises. Without a similar rise in supply, the price of oil will rise. When the recession hit in 2008 and economic activity dropped in many of the world's leading economies, the price of Brent plummeted from $145 […]

Who Controls the World's Oil?

Since the mid 19th century, Oil has fueled the industrial revolutions and economic developments of nearly every country on earth. This slowly dwindling resource has also contributed to some of the worst wars in modern history. When it comes to international power, control over oil can be just as important as military or diplomatic strength. But the overwhelming majority of the world's oil is held by only a small handful of people. In terms of output, […]