Oil’s importance in fuel and industry makes it one of the world’s most essential commodities. Due to numerous economic and political reasons the supply and demand for oil fluctuates constantly but, for traders, this provides opportunities to profit from Oil Trading ROYAL CAPITAL MARKETS provides trading execution in Oil and Nat Gas markets including UK Oil and US Oil, two of the most popular energy CFD instruments. Oil and Nat Gas products can be traded in both account types
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Initial deposit: $10
Account currency: USD, EUR, GBP, BTC, XRP, ETH
Spread floating from: 1.4 pip
Leverage up to: 1000:1
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Spread floating from: 0.0 pip
Leverage up to: 500:1
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Trade from: 0.01 lot
Investing in energy resources
Are you fascinated by the world economy and international trade? Wondering why fuel prices change so often and rapidly? Would you like to know the factors that determine the situation on international energy commodity markets to the greatest extent? Wondering which raw materials are most desirable and popular among investors? You have absolutely no idea how it all works? Would you like to increase your knowledge in this area? Are you looking for proven and reliable information? Do you want the message to be clear and understandable, also for a layman? If so, you’re in the right place!
Characteristics of the energy resources market
At the beginning of this text, it is worth explaining quickly and easily what energy resources really are. Of course, these are raw materials from which we are able to obtain energy after appropriate chemical or physical processing. Therefore, the following substances should be included among them: natural gas, oil and coal. Of course, each of these raw materials is a natural resource, which occurs in a limited way on our planet. It is worth knowing where the largest deposits of these substances are located. As far as oil is concerned, three countries are leading the way in its production: Saudi Arabia, the USA and Russia. In the case of natural gas, the three countries that produce it most are Russia, the USA and Canada. As far as coal is concerned, however, the largest deposits can boast China, Russia and the USA. The market of energy resources is thus shaped practically only by the above-mentioned powers. In short, we can say that it depends on their internal clashes and conflicts, at what price we will be able to purchase goods made of these raw materials.
The most popular energy resources among investors
As far as trade in energy resources is concerned, crude oil and natural gas are by far the most popular among investors. This is for obvious reasons: it is from these raw materials that the most desirable substances in the world are produced – for example, fuels for cars and aircraft.
What does the price of energy resources depend on?
The price of energy resources is very vulnerable to frequent and extreme changes. This can easily be observed by car drivers who regularly refuel. Very often it happens that the price of fuel changes practically from day to day. Of course, the geopolitical situation undoubtedly has the greatest influence on this – in short, everything depends on the political situation in Russia, the USA and the Arab countries. Of course, the greater the tensions between these powers, the more expensive or cheap the raw material is. An important factor is undoubtedly the demand for a given raw material and the natural situation in a given country. If there is a sudden catastrophe or natural disturbance, such as flooding or drought, the prices of raw materials change rapidly. A good example is also how fuel prices will be affected in the future by the crisis caused by the international coronavirus pandemic.
Hundreds of oil species with different properties are produced worldwide, but four of them are by far the most popular on the financial markets: WTI (West Texas Intermediate, also known as Texas Light Sweet), Brent, Ural (or REBCO – Russian Export Blend Crude Oil) and ORB (OPEC Reference Basket). Create an account with Royal Capital Markets and start trading in energy today.
A very big advantage of investing in ETFs with exposure to the oil market is practically unlimited market flow, as they are listed on the world’s largest trading floors. In addition, by investing in ETFs, we can use leverage, which allows for much less capital exposure. Create an account with Royal Capital Markets and start trading in energy today.
The main factor influencing oil prices is the exchange rate of the US dollar. This is due to the fact that the world oil price is denominated in dollars (the denomination of the conversion of oil prices from national currencies to dollars). A low value of the exchange rate may affect the volume of demand and supply. Create an account with Royal Capital Markets and start trading in energy today.