Oil Futures

Oil futures are one of the most widely traded commodities anywhere in the world, and they have been widely traded since trading began in 1983 on the NYMEX. As the name suggests, trading is based on the price that you predict that oil will be at, on a date in the future and part of the challenge is to determine whether prices will go up or down.

Trading oil futures can be extremely lucrative, due largely to the amount of leverage that you typically get, and in some ways it is just like trading other types of futures. However, because the price of crude oil is so heavily affected by external sources, it can also be more challenging to successfully trade oil futures than trade commodity futures. Often, it is useless to try to use the analytical techniques used in other futures trading. Some of the factors that can affect oil futures prices are inflation, OPEC production and general supply and demand, and if you are planning to trade oil futures, there are several key points that you should keep in mind.

The main reason for the establishment of crude oil futures is so that suppliers are able to hedge against their personal supply, and there can often be conflicting signals to buy and sell, once you add the typical group of traders and speculators into the mix. Electronics have influenced the oil futures market, like every other aspect of our lives and today, you can trade easily from home using one of the many online platforms available.

An effective way to obtain and use valuable information that can influence your trading strategy is with the use of technical analysis, and many different methods can be used. Of course, you should always trade within your own comfort zone and any guidelines should be regarded as such.

With volatility being one of the most attractive aspects about trading Oil there is a real essential need to keep up with news that can affect the price. Price swings can be wild on an intraday basis so by using websites such as CmeGroup.com you can get the latest prices alongside news articles direct from the market. CME Group provides the exchanges Nymex and Cbot and allows investors from around the globe to trade Oil in US Dollars.