In today’s blog we are going to talk about the oil market. In the oil market many traders, professional traders and professional investors are making money every day in the oil market. How do they do that? Before we are going to discuss that, please check this video below. This video will explain you in five minutes of how the oil market works and who the major players are.
How to make a profit in trading the oil market?
As you can see in the video above some of oil companies in the world are owned by governments/countries such as Saudi Arabia. When such parties have power to control the oil market. They are in control of price. Like OPEC , they have been in control of the market for years. But at the moment they are slowly losing control.
The price of oil is always determined by supply and demand. And the general thumb rules for supply and demand is as follow:
1. If the Supply is bigger then the demand. The Oil price will go down
2. If the Supply is smaller then the demand. The Oil price will go up
In order to make money on trading oil. All you need to do is to research what the plans of OPEC are. If they decided that they will increase the oil production then you know that soon or later the oil price on the oil market will drop. And if OPEC decides to decrease the production. Then you know that the price of oil will increase soon or later on the oil market.
Sometimes you see that oil price is increasing or decreasing without any real confirmed reasons. The reason for this is that most professional traders are speculating that based on their own facts of the current market situation. That OPEC will soon announce that they will take action to react to the current market condition.
How to start trading in the oil market?
One of the best way to start trading in oil is to trade in oil cfds. Because it gives you the best leverage. And because of that leverage you can make a lot money with a small investment. If you want to know more about CFDs then click here: CFDs the basics.
You start practise with trading by opening a demo account by clicking here: Oil Trading Practise account
Or you can open a trading account and receive a nice welcome bonus cash for trading by clicking here: Open Trading Account & Bonus